(solution) In 2006, the European Union (EU) threatened to ban imports of

(solution) In 2006, the European Union (EU) threatened to ban imports of

In 2006, the European Union (EU) threatened to ban imports of long-grain rice because traces of genetically modified rice were found mixed in to commercial supplies. Instead of a ban, suppose the EU placed a tariff on the import of long-grain rice. Which of the following would be an outcome of this tariff?

A) The price of long-grain rice in the EU would not change.

B) European rice producers would decrease production.

C) Deadweight loss would decrease.

D) The EU would gain tariff revenue.