Question

QUESTION 29

1. A lower tariff on imported cars would most likely hurt:

   		Foreign producers at the expense of domestic consumers
   		Domestic manufacturers of cars.
   		Domestic consumers of cars
   		Workers in the domestic car industry

QUESTION 30

1. An export tariff

   		is when a country requires that only a specific amount of a good (say, 50,000 units) be exported.
   		is not used by the American government.
   		is an example of specific tariff.
   		may hurt consumers in the country that imposes the export tariff.

Answer 1

29. Tariff on imports is likely to benefit domestic manufacturers who are able to avoid the competition by international producers. Tariff increases the price of imports and consumers refrain from consuming these products and move towards cheaper domestic alternatives. A decrease in tariff rates in thus, likely to reduce the price of imports and would attract domestic consumers to purchase imported cars. The domestic producers would be hurt by this action because they will loose their customers. Thus, option B is correct.