1. The main redistribution effect of a tariff is the transfer of income from:

a. domestic government to domestic consumers.

b. domestic producers to domestic government.

c. foreign producers to domestic consumers.

d. domestic buyers to domestic producers.

e. domestic producers to domestic buyers.

2. A country’s overall welfare effect of an import quota will come down to…

a. The difference between consumer surplus and producer surplus

b. Change in the terms of trade - production market distortion - consumption market distortion

c. Quota rents – the production market distortion + change in the terms of trade

d. Production market distortion + consumption market distortion +/- quota rents + change in the terms of trade

e. Change in the terms of trade - production market distortion - consumption market distortion +/- quota rents

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The detailed answer for the above question is provided below The main redistribution effect of a tariff involves the transfer of income from various s... View the full answer