If protective import-restricting tariff are imposed by a country, in the majority of cases that nation's consumers end up
A) paying a lower price and consuming more of the good than they otherwise would.
B) paying a lower price and consuming less of the good than they otherwise would.
C) paying a higher price and consuming less of the good than they otherwise would.
D) paying a higher price and consuming more of the good than they otherwise would.

Question

Quizplus · Accepted Answer

Protective import-restricting tariffs increase the price of imported goods, making them more expensive for consumers. As a result, consumers will consume less of the good than they otherwise would at a lower price. This is why choice C is correct. Choices A and D are incorrect because consumers cannot consume more when they pay a higher price due to the tariffs. Option B is wrong because lower prices are unlikely to be observed after the tariffs have been put in place.

If Protective Import-Restricting Tariff Are Imposed by a Country, in the Majority