If Country I Is Trading in the Inelastic Range of Country

question 26

Multiple Choice

If country I is trading in the inelastic range of country II's offer curve, then the imposition of a tariff by country I, which still leaves country I in the inelastic range of country II's curve, will (assuming no retaliation) lead to __________ in country I's terms of trade and to __________ in the volume of imports of country I.

• A) a deterioration; a decrease
• B) a deterioration; an increase
• C) an improvement; a decrease
• D) an improvement; an increase

---

Definitions:

Public Policy Exception

An exception to the enforcement of contracts or agreements when they conflict with the public interest or established norms of fairness and justice.

Implied Covenant

A legal promise that is not explicitly stated but is considered a part of a contract to ensure fairness.

Assumption of Risk

A legal principle where an individual knowingly and voluntarily takes on the risks associated with an activity.

Disclaimers

Statements that deny responsibility or limit liability for certain information, opinions, or potential risks.