The Main Redistribution Effect of a Tariff Is the Transfer

question 46

Multiple Choice

The main redistribution effect of a tariff is the transfer of income from

• A)domestic buyers to domestic producers.
• B)domestic producers to domestic buyers.
• C)domestic government to domestic consumers.
• D)domestic producers to domestic government.
• E)foreign producers to domestic consumers.

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Definitions:

MC

Marginal Cost, which is the increase in total cost that arises from producing one additional unit of a good or service.

Price-Discriminates

Price discrimination involves selling the same product or service at different prices to different customers, based on factors like demand, cost of serving, or market segmentation.

Producer Surplus

The difference between what producers are willing and able to supply a good for and the actual price they receive, measuring the benefit to producers from market transactions.

Deadweight Loss

The decline in economic productivity due to the failure to achieve or the impossibility of achieving equilibrium for a specific good or service.