When Can a Country Gain a Price Advantage on Imports

question 132

Multiple Choice

When can a country gain a price advantage on imports by imposing a tariff?

• A)when it is the largest country with absolute advantage in all goods 
• B)when it has a comparative advantage in the production of all goods 
• C)when it can do so without other countries retaliating with tariffs 
• D)when trade agreements prohibit quotas but permit tariffs

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Definitions:

Nonnegotiable

A term describing instruments or securities that cannot be transferred or assigned to another party.

Duress

A condition in which a person performs an act as a result of violence, threat, or other pressure against the person.

Fraudulent Inducement

A legal claim based on a misrepresentation of fact that leads another to enter into a contract or transaction with detrimental reliance on that misrepresentation.

Infancy

A stage in human development from birth up to, but not including, puberty; in legal terms, refers to a period during which a person is considered a minor and under the protection of guardians or parents.