Of the Following, Who Gains Because of Tariffs and Why

question 103

Multiple Choice

Of the following, who gains because of tariffs and why?

• A) Foreign governments because they gain more revenue.
• B) Domestic buyers because they pay a lower price.
• C) Domestic buyers because they can be sure of buying high-quality products.
• D) Foreign producers because they earn more total revenue.
• E) Domestic producers of protected goods because they can sell at a higher price.

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Definitions:

Overhead Applied

An accounting method used to allocate estimated overhead costs to specific products or job orders based on a predetermined rate or method.

Machine Hours

A measure of the amount of time a machine is operating during a specific period.

Under/Overapplied Overhead

This term identifies the discrepancy between the estimated overhead costs allocated to products or services and the actual overhead costs incurred.

Standard Cost

The estimated or predetermined cost of manufacturing a single unit of product or performing a service, used for budgetary and performance evaluation purposes.