High School

If the United States imposes a tariff of $5 per bottle on French wine, the most likely effect will be to raise the:

A. Price of wine in the United States by more than $5 per bottle.
B. Price of wine in the United States by $5 per bottle.
C. Price of wine in the United States by less than $5 per bottle, and lower the price of wine in France by less than $5 per bottle.
D. Price of wine in the United States by less than $5 per bottle without affecting the price of wine in France.

Answer :

The most likely effect would be c. The price of wine in the United States would likely increase by less than $5 per bottle, while the price of wine in France would also likely increase by less than $5 per bottle.

Tariffs are taxes imposed on imported goods, and they can affect the prices of those goods in both the importing country (in this case, the United States) and the exporting country (France in this scenario).

However, the actual impact on prices can vary depending on several factors such as market conditions, demand, supply, and the specific nature of the goods being traded.

In this case, imposing a $5 per bottle tariff on French wine would likely result in a price increase for consumers in the United States, but the increase may not necessarily be exactly $5 per bottle.

Similarly, the price of wine in France may also see a slight increase, although the actual amount could be less than $5 per bottle.