A Tariff ________ a Deadweight Loss and an Import Quota

question 80

Multiple Choice

A tariff ________ a deadweight loss and an import quota ________ a deadweight loss.

• A)creates;creates
• B)does not create;creates
• C)creates;does not create
• D)does not create;does not create
• E)sometimes creates;always creates

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Definitions:

Pure Monopoly

A market structure where a single firm controls the entire market for a product or service, with no close substitutes and significant barriers to entry.

Allocatively Inefficient

A situation where resources are not distributed in a way that maximizes the benefits to society, often leading to a loss of economic welfare.

Marginal Benefit

The additional satisfaction or utility gained from receiving or consuming one more unit of a good or service.

Marginal Cost

The cost of producing one additional unit of a product or service, a key concept in economic theory for decision-making and pricing.