A Tariff Can Best Be Described as

question 12

Multiple Choice

A tariff can best be described as

• A) an excise tax on an imported good.
• B) a government payment to domestic producers to enable them to sell competitively in world markets.
• C) an excise tax on an exported good.
• D) a law that sets a limit on the amount of a good that can be imported.

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Definitions:

Implicit Costs

Implicit costs, also known as imputed or opportunity costs, are the costs of resources owned by the firm that are used in its own production process.

Explicit Costs

Direct, out-of-pocket payments for wages, rent, materials, and other inputs in the production process.

Opportunity Costs

The value of the best alternative foregone when a decision is made to pursue a particular action, essentially the cost of choosing one option over another.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production, instead of earning income elsewhere.