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The European Union imports bananas from Latin America as well as imports from Europe's former ...

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The European Union imports bananas from Latin America as well as imports from Europe's former ...

The European Union imports bananas from Latin America as well as imports from Europe's former colonies in the African, Caribbean and Pacific (ACP) group. In 2006 the tariff on bananas from Latin America was higher than on ACP bananas. Which of the following statements is NOT true?
A) The price European consumers pay for bananas is higher with the tariff than the free trade price
B) The gain from free trade is decreased because of banana tariffs
C) For European consumers, the price of ACP bananas is lower than Latin American bananas
D) European consumers are better off with tariff than with free trade

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Foundations of Macroeconomics

Edition: 8^th

Authors: Bade, Parkin

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