If a Tariff Is Imposed on Imported Televisions, We Expect

question 5

Multiple Choice

If a tariff is imposed on imported televisions, we expect domestic demand for televisions to:

• A) fall, and the total supply to increase.
• B) rise, and the total supply to decrease.
• C) rise, and the total supply to rise.
• D) remain unchanged, and the total supply to decrease.

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Definitions:

Average Variable Cost

The total variable cost per unit of output, obtained by dividing total variable costs by the quantity of output.

Output

The total amount of goods or services produced by a company or country.

TVC

Total Variable Cost, the sum of all variable costs (costs that vary with production volume) associated with producing a specific quantity of a good or service.