Question

"A tariff differs from a quota in that a tariff is: Select one: a. levied on imports, whereas a quota is imposed on exports. b. levied on exports, whereas a quota is imposed on imports. c. a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. d. a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

Answer 1

Answer: tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported. (D)

Step-by-step explanation:

Protectionism is the act of protecting local firms from foreign competition. It helps in the growth of infant industries and can also be used to prevent dumping in a country. Some forms of protectionism used are tariffs, quotas etc.

A tariff is a tax imposed on imports. When a tariff is imposed on imports, it leads to an increase in the price of the good as it is an additional cost to the producer. A quota is a limit to the number of goods that can be brought into a country.