Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 9 - Part III - Application: International Trade - Quick Check Multiple Choice - Page 190: 6

Answer

d) government revenue

Work Step by Step

A tariff is a tax on goods produced abroad and sold domestically. This tax generates revenue for the government. In comparison, a quota is a mere restriction on the quantity of imports without any revenue payable to the government. The impact on consumer surplus, producer surplus and international trade varies according to the specific tariff/quota.
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