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A tax of 20 cents per unit of imported cheese would be an example of: Compound tariff Effective tariff Ad valorem tariff Specific tariff

Question

A tax of 20 cents per unit of imported cheese would be an example of:

  • Compound tariff
  • Effective tariff
  • Ad valorem tariff
  • Specific tariff
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Solution

Step 1: Break Down the Problem

We need to identify the type of tax based on the provided options, which include different forms of tariffs imposed on imported goods.

Step 2: Relevant Concepts

  1. Specific Tariff: This is a fixed fee based on the quantity of the product, such as a certain amount per unit (e.g., cents per cheese unit).
  2. Ad Valorem Tariff: This is a percentage of the value of the imported goods.
  3. Compound Tariff: This is a combination of both specific and ad valorem tariffs.
  4. Effective Tariff: This is the overall rate of a duty that actually applies after exemptions and other adjustments.

Step 3: Analysis and Detail

Since the problem specifies a tax of 20 cents per unit of cheese, it matches the definition of a specific tariff, which charges a fixed amount regardless of the price of the cheese.

Step 4: Verify and Summarize

Based on the definitions, the tax given (20 cents per unit) indeed corresponds to the nature of a specific tariff as it is a unit-based charge rather than a value-based one.

Final Answer

The answer is: Specific tariff.

This problem has been solved

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