The effects of tariffs and quotas are: a(n)__________ in consumers' surplus,and a(n)__________ in producers' surplus.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Quizplus · Accepted Answer

Tariffs and quotas decrease consumers' surplus because they lead to higher prices for consumers. They increase producers' surplus by providing domestic producers with protection from foreign competition, allowing them to charge higher prices.

The Effects of Tariffs and Quotas Are: A(n)__________ in Consumers