Which of the Following Would Be Expected If the Tariff

question 62

Multiple Choice

Which of the following would be expected if the tariff on foreign-produced shoes were decreased?

• A) The domestic price of shoes would fall.
• B) The supply of foreign shoes to the domestic market would decline, causing shoe prices to rise.
• C) The number of unemployed workers in the domestic shoe industry would decline.
• D) The demand for foreign-produced shoes would decrease, causing the price of shoes to increase in other nations.

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Definitions:

Marginal Product

The increase in output that results from a one-unit increase in the quantity of a single input, holding the quantities of all other inputs fixed.

Average Product

It is the output that is produced, on average, by each unit of input in the production process, like labor or machinery.

Production Function

A mathematical relationship that describes how inputs are transformed into outputs in the production process, illustrating the maximum output achievable from a given set of inputs.

Marginal Product

Marginal product is the additional output a firm gains from employing one more unit of input, holding all other inputs constant.