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Question
The U.S. government is considering implementing a tariff on processed vegetables imported from India. Assuming that the U.S. is an importer of processed vegetables, which of the following correctly explains the impact on the U.S. market?(1 point)
Responses

The quantity of processed vegetables demanded will fall since the tariff will lower the domestic market price below the world price.
The quantity of processed vegetables demanded will fall since the tariff will lower the domestic market price below the world price.

The quantity of processed vegetables demanded will rise since the tariff will lower the domestic market price below the world price.
The quantity of processed vegetables demanded will rise since the tariff will lower the domestic market price below the world price.

The quantity of processed vegetables demanded will fall since the tariff will raise the domestic market price above the world price.
The quantity of processed vegetables demanded will fall since the tariff will raise the domestic market price above the world price.

The quantity of processed vegetables demanded will rise since the tariff will raise the domestic market price above the world price.

Answer 1

The correct response is:

The quantity of processed vegetables demanded will fall since the tariff will raise the domestic market price above the world price.

When a tariff is imposed on imports, it increases the price of those imported goods. In this case, the tariff on processed vegetables from India would raise their price in the U.S. market, leading to a decrease in the quantity demanded by consumers, as they may either look for substitutes, reduce their overall consumption, or find the higher prices unappealing.