A Tariff Affects Imports

question 76

Multiple Choice

A tariff affects imports

• A)by limiting quantity and raising price to a higher level.
• B)by reducing quantity demanded so that supply falls.
• C)by increasing supply, raising price, and reducing demand.
• D)by raising price and reducing quantity demanded.

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Definitions:

Marginal Cost

The extra financial burden of producing an additional unit of a product or service.

Profits

The financial gain received by a business after subtracting the total costs from the total revenues generated through its operations.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price.

Marginal Cost

The additional cost of producing one more unit of a product or service.