The Imposition of a Tariff on an Imported Good Causes

question 43

Multiple Choice

The imposition of a tariff on an imported good causes consumer surplus to ________ and producer surplus to ________.

• A)increase; increase
• B)decrease; decrease
• C)decrease; increase
• D)increase; decrease
• E)remain the same; decrease

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Definitions:

Sales

The cumulative amount of money made by a business from selling its goods or services.

Average Collection Period

The average collection period is the average amount of time it takes for a business to receive payments owed by its customers for sales made on credit.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for.

Sales on Account

Transactions where goods or services are delivered with payment to be made at a later date, typically recorded as accounts receivable.