Which of the Following Is NOT Correct About the Effects

question 21

Multiple Choice

Which of the following is NOT correct about the effects of a tariff on an imported product?

• A)Tariffs benefit domestic producers by raising price and domestic output.
• B)Tariffs increase government revenue.
• C)Tariffs mean higher prices and less consumption for consumers of the product.
• D)Tariffs increase the efficiency of how resources are allocated.

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Definitions:

Total Fixed Costs

The total of all expenses that stay the same no matter the amount of production or output.

Average Total Costs

The total cost of production (fixed and variable costs combined) divided by the number of units produced; it shows the cost per unit of output.

Variable Costs

Costs that change in proportion to the level of output in the production process.

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or output in the short run.