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Why might legislators vote to impose a tariff on Egyptian cotton, when consumers in their districts would benefit from its availability?

a. To decrease revenue
b. To increase prices for consumers
c. To protect local cotton producers
d. To discourage cotton production

1 Answer

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Final answer:

Legislators might vote to impose a tariff on Egyptian cotton to protect local cotton producers and generate government revenue, despite higher prices for consumers and potential retaliation from trade partners.

Step-by-step explanation:

Legislators might vote to impose a tariff on Egyptian cotton even if consumers in their districts would benefit from its availability to protect local cotton producers. This action can be understood as a means of supporting domestic industry by making imported goods more expensive, thereby encouraging consumers to buy locally produced cotton. Moreover, tariffs can provide the government with additional revenue, which can be used for various internal improvements or other government expenses.

However, it's important to note that while tariffs can protect domestic jobs in the cotton industry, they can also lead to higher prices for consumers and retaliation from other countries, which may impose their own tariffs on exports from the legislators' country. This retaliation can harm other sectors of the economy, such as agriculture or manufacturing that rely on exports. Despite the immediate protection it offers to local producers, a tariff can cause broader economic disadvantages, such as market inefficiencies and higher costs for both producers and consumers.

Often, legislators face pressure from various interest groups, such as domestic cotton producers, who may have more political influence and a concentrated benefit from tariffs, unlike consumers, who are more diffuse and have less incentive to organize against such trade barriers.

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