Question

Which of the following statements correctly identify the difference in the revenue effect created by an import quota versus that of a tariff? Check all that apply. Quotas always generate revenue for the government, whereas the tariff's revenue is uncertain. Tariffs always generate revenue for the government, whereas a quota's revenue is uncertain. The revenue effect of an import quota is essentially the same as that of an equivalent tariff. Unlike tariffs, quotas do not generate government revenue unless importers are charged a licensing fee

Answer 1

Unlike tariffs, quotas do not generate government revenue unless importers are charged a licensing fee.

Tariffs always generate revenue for the government, whereas a quota's revenue is uncertain.

Step-by-step explanation:

Quotas are a condition for performing certain activity, that if you fall under the quota then only you can do that activity.

Thus, when the quotas are there then they do not provide any revenue to government, unless it is in the form of license requirement for which the user needs to pay.

Tariffs are the charges imposed by the government to do certain act.

Therefore, it clearly states that there will always be revenue on the point where there is these transactions that is Tariffs.