Question

question 30

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.

31

If Mexico reduces its tariffs on imports, it will result in:

		An increase in imports but a decrease in domestic production
		A decrease in imports but an increase in domestic production
		An increase in price but a decrease in quantity purchased
		A decrease in price and a decrease in quantity purchased

Answer 1

Answer 30:

An export tariff may hurt consumers in the country that imposes the export tariff.

Reason for (d) as the answer is because: Export duties are charged on the goods produced in home country and about to leave home country. This leads to reduction in supply of the goods in the home country and consumers are mostly affected due to export tariffs.

Answer 31:

If Mexico reduces its tariffs on imports, it will result in an increase in imports but a decrease in domestic production

Reason for (a) as the answer is because: Tariffs are used to restrict imports by increasing the price of goods and services purchased from overseas and making them less attractive to consumers.