Question

In general, the costs tariffs and quotas impose on consumers are_______ A) small in total and small per person. B) large in total but relatively small per person C) large in total and large per person. D) small in total but relatively large per person.

Answer 1

The costs of tariffs and quotas are significant overall but are usually relatively small for each individual consumer, as these costs are dispersed across the population.

Step-by-step explanation:

The question relates to the economic impact of trade barriers such as tariffs and quotas on consumers. In general, the costs that tariffs and quotas impose on consumers are large in total but relatively small per person (Option B). This is because, while the overall effect on the economy can be significant, the cost per individual consumer is often dispersed across many individuals. This cost takes the form of higher prices for imported goods due to tariffs, or restricted availability of goods due to quotas, which can also drive up prices. As a result, consumers end up paying more for certain items than they would in the absence of these trade barriers.