Which of the following is an example of a tariff?

• A. A \$5 tax imposed on each imported car
• B. A quota limiting the number of cars that can be imported
• C. A ban on importing cars from certain countries
• D. A government subsidy for domestic car producers

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the definition of a tariff. A tariff is a tax imposed by a government on goods imported from other countries, usually expressed as a fixed amount per unit or a percentage of the value of the imported good.
2. Step 2: Review each option and identify whether it fits the definition of a tariff. For example, a \$5 tax on each imported car directly matches the definition of a tariff because it is a tax applied to imports.
3. Step 3: Recognize that a quota limiting the number of cars is a quantitative restriction, not a tax, so it is not a tariff.
4. Step 4: Understand that a ban on importing cars from certain countries is a prohibition, not a tax, so it is not a tariff.
5. Step 5: Note that a government subsidy for domestic producers is a financial support to local businesses, not a tax on imports, so it is not a tariff.