Final answer:
When a country sets a tariff on imports, the price of those imports increases. However, the price increase is less than the amount of the tariff. The rest of the tariff amount is paid by the consumers in the importing country.
Step-by-step explanation:
In the context of international trade, when a country sets a tariff on imports, it raises the price of those imports. However, the price increase is typically less than the amount of the tariff itself. The rest of the tariff amount is paid by the consumers in the importing country.
To illustrate this graphically, we can plot a supply and demand graph. The vertical axis represents price, and the horizontal axis represents quantity. With a tariff, the supply curve shifts upward, leading to a higher equilibrium price. However, the price increase is smaller than the amount of the tariff.