Which of the Following Statements About a Tariff Is True

question 43

Multiple Choice

Which of the following statements about a tariff is true?

• A) A tariff increases producer surplus, decreases consumer surplus, increases revenue to the government, and increases total surplus.
• B) A tariff increases consumer surplus, decreases producer surplus, increases revenue to the government, and reduces total surplus.
• C) A tariff increases producer surplus, decreases consumer surplus, increases revenue to the government, and reduces total surplus.
• D) A tariff increases consumer surplus, decreases producer surplus, increases revenue to the government, and increases total surplus.

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Definitions:

Relative Advantage

The degree to which an innovation is perceived as better than the idea it supersedes.

Diffusion

The process through which an innovation is communicated over time among the participants in a social system.

Innovation

The act of inventing, evolving, and applying novel concepts, goods, or techniques to enhance or substitute the current ones.

Observability

The degree to which the results of an innovation or change can be seen and understood by others.