In the Large­country Case, When a Tariff Is Imposed, the Country

question 81

Multiple Choice

In the large­country case, when a tariff is imposed, the country:

• A)sees a terms­of­trade gain.
• B)is able to reduce world price of the imported good.
• C)is going to experience an increase in consumer surplus.
• D)sees a terms­of­trade gain and is able to reduce world price of the imported good.

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Definitions:

Diminishing Marginal Utility

A concept in economics stating that as a person increases consumption of a product, there is a decline in the marginal utility (satisfaction or benefit) that person derives from consuming each additional unit of that product.

Calorie Counts

The measurement of energy provided by food and drink, important for managing dietary health and weight control.

Consumer Behavior

The study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

Marginal Utility

The incremental utility or enjoyment gained from the consumption of one more unit of a good or service.