Trade Protection Measures Compared

Steps:

• Define key terms: Tariffs raise import prices; embargoes ban trade; subsidies aid exports; quotas limit import quantities.
• Assess elasticity effects: Lower price elasticity means less demand drop from price hikes.
• Evaluate revenue and effectiveness: Quotas restrict quantity without direct tax collection.
• Compare protections: Subsidies boost domestic output but don't block foreign dumping directly.

Why D is correct:

• Quotas limit import volumes but generate no government revenue, unlike tariffs which tax imports and raise funds directly.

Why the others are wrong:

• A: A tariff decreases import demand more when elasticity is higher, as quantity responds strongly to price changes.
• B: Embargoes ban imports outright, effective regardless of demand elasticity.
• C: Export subsidies help domestic firms compete abroad but do not prevent foreign dumping in the home market.

Final answer: D