Question at position 13 Rice imports to a nation under a quota limit of 8,500 tons are charged a tariff of 15 percent. Imports of rice above the quota limit are charged a tariff of 60 percent. This is an example of a(n) __.export quotavoluntary export restraintad valorem tarifftariff quotaSingle choice
A
export quota
B
voluntary export restraint
C
ad valorem tariff
D
tariff quota

Question

Question at position 13 Rice imports to a nation under a quota limit of 8,500 tons are charged a tariff of 15 percent. Imports of rice above the quota limit are charged a tariff of 60 percent. This is an example of a(n) __.export quotavoluntary export restraintad valorem tarifftariff quotaSingle choice

A

export quota

B

voluntary export restraint

C

ad valorem tariff

D

tariff quota

BlackTom AI · Accepted Answer

The question presents a trade policy instrument where imports up to a specified quantity (the quota) are taxed at one tariff rate, and imports above that quantity are taxed at a higher rate. This structure is characteristic of a tariff-rate quota rather than a simple tariff or a pure quota.
Option 1: 'export quota' — An export quota restricts the amount of a good that can be exported from a country, not the tariff treatment applied to imports. Since the scenario concerns import duties and a tiered tariff based on quantity, this option describes a different instrument entirely.
Option 2: 'voluntary export restraint' — A VER is an agreement between exporting and importing countries where the exporter limits exports, often with side payments or negotiations, but it does not specify a tariff schedule that changes with the quantity imported. The given scenario uses tariffs, not an agreement-based quantity restraint, so this does not fit.
Option 3: 'ad valorem tariff' — An ad valorem tariff is a single percentage tax levied on the value of imports, regardless of quantity. The problem describes a two-tier tariff that depends on the quantity imported (within the quota vs above it), which goes beyond a uniform ad valorem rate.
Option 4: 'tariff quota' — A tariff-rate quota is exactly a system where imports up to a designated quota are charged one tariff rate, and imports beyond that quota are charged a higher, often much higher, tariff rate. This matches the described structure of 15 percent within the 8,500-ton quota and 60 percent above it.

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