If Canada Initially Has No Tariffs and It Then Imposes

question 106

Multiple Choice

If Canada initially has no tariffs and it then imposes a 10 percent tariff on a specific commodity, we would expect to observe

• A)an upward shift in the commodity's supply curve.
• B)a reduction in the production of the commodity in Canada.
• C)an increase in the tariff revenue collected by the Canadian government.
• D)an upward shift in the commodity's demand curve.
• E)a downward shift in the commodity's demand curve.

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Definitions:

ABC System

Stands for Activity-Based Costing system, a method of allocating overhead and indirect costs to specific products or services based on their consumption of resources.

Prime Cost

Direct materials plus direct labor costs.

Machine Hours

The total number of hours that machines are used or operated during a specific time period, often used as a basis for allocating manufacturing overhead.

Direct Labor Hour

A measure of the time spent by workers manufacturing a product or delivering a service.