Recall the Application About the Cost of Protecting a Luggage

question 35

Multiple Choice

Recall the application about the cost of protecting a luggage job,luggage and handbags are subject to import quotas and tariffs that decrease the supply of luggage and increase the price to consumers by 13 percent.These policies protect 226 jobs in the industry,which of the following statements is true about the impact of protecting these jobs?

• A)Consumer surplus increases.
• B)Consumer surplus decreases.
• C)Producer surplus decreases.
• D)none of the above

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Definitions:

Administrative Expenses

Costs related to the general operations of a company, such as salaries of non-production staff, office supplies, and utilities.

Merchandise Inventory

Goods a company holds for the purpose of resale in the normal course of business.

Product Costs

These are costs that are directly associated with the creation of a product, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Expenses incurred by a business that are not directly tied to the production process and are charged to the period in which they occur.