A Compound Tariff Permits a Specified Amount of Goods to Be

question 86

True/False

A compound tariff permits a specified amount of goods to be imported at one tariff rate while any imports above this amount are subjected to a higher tariff rate.

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Definitions:

Competitive Increasing-cost Industry

An industry in which the entry of new firms causes the prices of inputs to increase, affecting the cost of production for all firms.

Long-run Equilibrium

A state in which all factors of production and inputs can be varied, allowing for full adjustment by firms and the economy, and no excess demand or supply exists.

Decline in Demand

A decrease in the willingness and ability of consumers to buy goods and services at existing prices, which can lead to lower market prices.

Constant-cost Industry

An industry in which the costs of production, including inputs and labor, do not change as the overall industry output changes.