A Common Argument for the Use of Tariffs (For a Large

question 79

Multiple Choice

A common argument for the use of tariffs (for a large economy) when the objective is to maximize a country's national income is to

• A)improve the country's terms of trade.
• B)subject infant industries to the discipline of the market.
• C)enjoy the advantages of diversification.
• D)prevent learning-by-doing by potential trade partners.
• E)increase the prices of domestic exports.

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Definitions:

Marginal Cost Curve

A graphical representation that shows how the cost of producing one additional unit varies as production increases.

Average Cost Curve

A graphical representation showing how the cost per unit of producing goods changes with changes in the volume of goods produced, highlighting economies and diseconomies of scale.

Market Level Supply

The total quantity of a good or service that producers are willing to sell across the entire market at a given price level.

Marginal Costs

The swelling of total charges resulting from generating an extra unit of a good or service.