A Large Country Can Gain from Imposing a Tariff on the Import

question 19

Multiple Choice

A large country can gain from imposing a tariff on the import of a good if:

• A)the tariff drives the quantity imported to zero.
• B)the tariff is high enough that the country becomes an exporter of the product.
• C)the part of the tariff paid by the foreign exporters is greater than the losses arising from the production and consumption effects of the tariff in the domestic market
• D)the tariff revenue collected by the domestic government is less than the losses caused by the production and consumption effects of the tariff.

---

Definitions:

Leisure Time

Time that an individual can spend at their own discretion, not occupied by work or domestic responsibilities.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to replace more expensive items with less costly alternatives.

Higher Wage

Refers to an increase in the amount of money that an employee receives for performing one hour or another standard unit of work.

Leisure Time

Free time that an individual can spend away from work, chores, and other compulsory activities, often used for relaxation or hobbies.