Scenario 9

question 28

Multiple Choice

Scenario 9.3 Use the following to answer the questions.
The United States believes China is selling its steel products in the U.S. at unfairly low prices. For many years, domestic steelmakers have complained, saying that they cannot compete against the influx of Chinese steel entering the market. China denies that it is engaging in such behavior. However, the United States has announced that imports of Chinese steel products will now be more expensive-in some cases, by as much as 265.79%. American steelmakers believe this is the only way they will be able to compete against Chinese steel imports.
Refer to Scenario 9.3. The reason Chinese steel products will be expensive is because the U.S. government is levying __________ against them.

• A) an embargo
• B) quotas
• C) exchange controls
• D) import tariffs
• E) export duties

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Definitions:

Consumer Surplus

The gap between what consumers are prepared to spend on a product or service and the actual amount they end up paying.

Maximum Willingness

The highest amount an individual is prepared to pay for a good or service, reflecting their subjective valuation of its utility.

Output

The total amount of goods and services produced by an economic system or by a firm.

Marginal Benefit

The boost in satisfaction or utility received from consuming one more unit of a good or service.