Final answer:
Tariffs are taxes on imported goods aimed at protecting domestic industries and raising government revenue, like a 5% tariff on imported flat-screen TVs. Excise taxes are levied on certain goods within the country, such as alcohol or gasoline. A reduced tariff on imported goods typically leads to lower prices and increased market quantity for those goods.
Step-by-step explanation:
Tariffs are a type of tax that governments apply to imported goods and services. The primary purpose of tariffs is to make imported goods more expensive relative to domestic goods, thereby protecting local industries and potentially increasing government revenue.
For example, if the U.S. government imposes a 5% tariff on imported large, flat-screen televisions, this makes those televisions more expensive for consumers in the U.S., which could lead to a decrease in imports of such items from countries like China.
Excise taxes, on the other hand, are taxes levied on particular goods or commodities produced or sold within a country, and they often apply to items like alcohol, tobacco, and gasoline, regardless of whether they are produced domestically or imported.
Using the information provided, you would categorize a tax on imported flat-screen televisions as a tariff. If a country reduces tariffs on such goods, the likely effect would be a decrease in the price of imported televisions, leading to an increase in the quantity of flat-screen TVs sold in the market (assuming demand remains the same) thus affecting the equilibrium price and quantity.