Question

Which result is the effect of an import tariff charged on a particular good?

a) The price paid by consumers is increased.
b) The price paid by consumers is decreased.
c) Domestic production increases.
d) International trade barriers are reduced.

Answer 1

An import tariff increases the price paid by consumers.

Step-by-step explanation:

An import tariff is a tax imposed on imported goods. The effect of an import tariff is that the price paid by consumers is increased. This happens because the tariff increases the cost of importing the goods, which is then passed on to the consumers in the form of higher prices.

For example, let's say there is an import tariff of $10 on a particular good. If the original price of the good was $100, the new price after the tariff would be $110.

Therefore, option a) The price paid by consumers is increased, is the correct answer.