The Benefits of Protective Tariffs Are

question 130

Multiple Choice

The benefits of protective tariffs are

• A) they increase the revenues of the government that has implemented them.
• B) they decrease the cost of the product to the consumer (end user).
• C) they help develop friendlier trade relations with loyal trading partners. Both parties are protected.
• D) they protect domestic jobs by encouraging cost-sensitive consumers to purchase domestic products.

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Definitions:

Marginal Cost

The heightened cost from fabricating an extra unit of a good or service.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of a product or service.

Industry Equilibrium Price

The price at which the quantity of goods supplied equals the quantity of goods demanded in an industry.

Marginal Revenue

The extra revenue received from selling an additional unit of a product or service.