When Can a Country Gain a Price Advantage on Imports

question 132

Multiple Choice

When can a country gain a price advantage on imports by imposing a tariff?

• A)when it is the largest country with absolute advantage in all goods 
• B)when it has a comparative advantage in the production of all goods 
• C)when it can do so without other countries retaliating with tariffs 
• D)when trade agreements prohibit quotas but permit tariffs

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Definitions:

States

Politically organized bodies of people under a single government, often referring to the constituent entities that make up a federal union, such as in the United States.

Cooperatives

An organization owned and operated by its members with the objective of benefiting them, often in purchasing or selling goods, obtaining services, or producing goods.

Unincorporated

Describes a business or area that has not been formed into a legal corporation or does not fall under a municipality's jurisdiction, respectively.

Limited Liability

A legal structure that restricts the financial liability of owners or shareholders of a company to the amount they have invested in the company.