A Nation Can Gain from Imposing a Tariff on Imports

question 61

Multiple Choice

A nation can gain from imposing a tariff on imports if it forces exporting countries

• A)to raise their prices to pay the tariff.
• B)to lower their prices to avoid stocks of unsold goods.
• C)to produce at diseconomies of scale.
• D)to accept some imports from the tariff-imposing nation.

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Definitions:

Long-Run Equilibrium

A state in which all factors of production and costs are variable, allowing firms to make adjustments so that supply equals demand, leading to no economic profit in perfect competition.

Marginal Cost

Additional financial obligation incurred by producing another unit of a product or service.

Product-Variety Externality

Occurs when the introduction of new products benefits consumers by expanding their choices, often leading to positive market effects.

Introduction

The initial section or the beginning part of a document, presentation, or text, aiming to give an overview or background of the subject matter.