A Decrease in the Import Tariff Will Result In

question 9

Multiple Choice

A decrease in the import tariff will result in:

• A) An increase in imports but a decrease in domestic production
• B) A decrease in imports but an increase in domestic production
• C) An increase in price but a decrease in quantity purchased
• D) A decrease in price and a decrease in quantity purchased

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Definitions:

Unit

A single item, person, or measurement regarded as an indivisible part of a larger quantity or whole.

Operating Leverage (DOL)

A measure of how revenue growth translates into growth in operating income, emphasizing the impact of fixed costs.

Operating Income (EBIT)

Earnings Before Interest and Taxes, a measure of a company's profitability from its operations.

Dollar Sales

The total revenue generated from the sale of goods or services, measured in dollars.