A difference between a quota and a tariff is that
A) a tariff generates a higher price than a quota does.
B) a tariff generates a greater reduction in exports.
C) a quota increases profits of domestic producers more than a tariff does.
D) the government collects revenues from a tariff, which does not happen with a quota.

Question

Quizplus · Accepted Answer

A tariff is a tax on imports, which generates revenue for the government. In contrast, a quota restricts the quantity of imports allowed and does not generate revenue for the government. Therefore, the government collects revenues from a tariff, which does not happen with a quota.

A Difference Between a Quota and a Tariff Is That