Final answer:
Tariffs are collected on imported goods and are distinct from other forms of taxation. A reduction in tariffs on flat screen televisions would likely lead to a lower equilibrium price and an increased quantity demanded due to the goods becoming more affordable.
Step-by-step explanation:
Tariffs differ from taxes because tariffs are collected on imported goods. This is in contrast to other forms of taxations such as income taxes, which are charged on personal or corporate income, or sales taxes that are applied to the sale of goods and services within a country. Tariffs are used as a tool to raise revenue for the government and to protect domestic industries by making foreign products more expensive, which can encourage consumers to buy locally produced goods.
If the U.S. government cuts the tariff on imported flat screen televisions, the four-step analysis would predict that the equilibrium price of flat screen TVs would decrease, making them more affordable to consumers. This is because the tariff reduction lowers the cost for importers, which is then reflected in the lower prices for consumers. Consequently, the quantity of flat screen TVs demanded would likely increase, as the lower prices would make them accessible to more buyers.