Question

Which of these is a positive incentive for domestic producers?

a subsidy on imported cars
a tariff on cars
a subsidy on domestic oranges
a tariff on clothes

Answer 1

All except "a subsidy on imported cars."

- A tariff on cars and a tariff on clothes raise the price of imported goods, protecting and incentivizing domestic producers.
- A subsidy on domestic oranges directly supports domestic producers.
- A subsidy on imported cars encourages imports and thus is not a positive incentive for domestic producers.