The Optimum Tariff Is

question 1

Multiple Choice

The optimum tariff is

• A) the best tariff a country can obtain via a WTO negotiated round of compromises.
• B) the tariff, which maximizes the terms of trade gains.
• C) the tariff, which maximizes the difference between terms of trade gains and terms of trade loses.
• D) not practical for a small country due to the likelihood of retaliation.
• E) not practical for a large country due to the likelihood of retaliation.

---

Definitions:

Direct Method

A financial accounting method that allocates service department costs directly to production departments without considering services rendered between service departments.

Net Income

The final earnings of a corporation, calculated by subtracting all operating costs and tax liabilities from its total sales revenue.

Accounts Receivable

Balances owed to a company by its customers for goods or services provided on credit.

Direct Method

A costing method primarily used in cost accounting that allocates service department costs directly to production departments without any intermediate allocations.