Asked by
Jorge MartineZ
on Nov 05, 2024
Verified
Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If the tariff is raised so that it now equals $10, tariff revenue in this country will be
A) $0.
B) $1,000.
C) $2,000.
D) $3,000.
Tariff Revenue
The income generated by a government from imposing taxes on imported and exported goods.
Domestic Price
The price of goods or services within a country, distinct from international or export prices.
Free Trade
An economic policy that allows goods and services to be bought and sold across international borders with minimal or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
- Acquire knowledge about the nature of tariff earnings and their reaction to alterations in tariff charges.
Verified Answer
SA
Learning Objectives
- Acquire knowledge about the nature of tariff earnings and their reaction to alterations in tariff charges.