A quota differs from a tariff in that quotas:
A) limit the volume of imports more than tariffs.
B) do not increase the price of imports as much as tariffs.
C) do not generate tax revenues, unlike tariffs.
D) reduce consumer welfare more than do tariffs.

Question

Quizplus · Accepted Answer

Quotas restrict the quantity of imports but do not generate tax revenue, whereas tariffs are taxes on imports that generate revenue for the government.

A Quota Differs from a Tariff in That Quotas