Canada Has Imposed Taxes on Some Imported Goods That Have

question 6

Multiple Choice

Canada has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production.What do these taxes do to Canada as a whole

• A)They benefit Canada as a whole, because they generate revenue for the government.In addition, because the goods are priced below cost, the taxes do not harm domestic consumers.
• B)They benefit Canada as a whole, because they generate revenue for the government and increase producer surplus.
• C)They harm Canada as a whole because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue.
• D)They harm Canada as a whole because they reduce the sum of consumer and producer surplus by an amount that exceeds the increase in government revenue.

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