If a Tariff Is Placed on a Good,the Domestic Price

question 4

Multiple Choice

If a tariff is placed on a good,the domestic price of the good ________,domestic production of the good ________,and domestic consumption of the good ________.

• A) increases;increases;increases
• B) increases;increases;decreases
• C) increases;decreases;decreases
• D) decreases;decreases;decreases
• E) decreases;increases;increases

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Definitions:

Contribution Margin Ratio

A financial metric that indicates the portion of sales revenue that exceeds variable costs, expressed as a percentage of total sales.

Fixed Expenses

Fixed expenses are costs that do not change with the volume of output, such as rent or salaries, providing stability in financial planning but requiring effective budget management.

Net Income

The total profit of a company after deducting all expenses, taxes, and losses, indicating its financial performance over a period.

Total Expenses

The sum of all costs and expenses incurred by a business during a specific period, including operating expenses and cost of goods sold.