Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 9 - Part III - Application: International Trade - Quick Check Multiple Choice - Page 190: 4

Answer

b) domestic quantity supplied

Work Step by Step

A tariff is a tax on goods manufactured abroad and sold domestically. A tariff reduces the domestic quantity demanded because it increases the price of a good. The quantity imported from abroad will decrease, because it makes foreign producers less competitive in the domestic market. As a result, the domestic quantity supplied will increase as the tariff gives domestic firms a greater share of sales.
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