A Real Cost of Tariffs and Quotas That Is Difficult

question 22

Multiple Choice

A real cost of tariffs and quotas that is difficult to measure is that they

• A)encourage rent seeking.
• B)shift income from consumers to producers.
• C)limit the quantity of imports.
• D)reduce wages.
• E)cause deflation.

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Definitions:

Marginal Cost

The incremental cost of manufacturing one more unit of a product or service.

Marginal Benefit

The enhanced satisfaction or advantage experienced from the consumption of one extra unit of a product or service.

Economic Perspective

A viewpoint that analyzes individuals' decisions based on costs, benefits, and rational self-interest within the framework of scarcity and resource allocation.

Economizing Problem

The fundamental economic issue of meeting unlimited wants with limited resources, necessitating choices and priorities in resource allocation.