A Major Effect of Trade Barriers Such as Tariffs,quotas,and Nontariff

question 28

Multiple Choice

A major effect of trade barriers such as tariffs,quotas,and nontariff barriers is that:

• A)aggregate social welfare is increased by keeping wealth within the country.
• B)consumers lose from higher prices,while import-competing producers benefit.
• C)export-oriented producers are supported,while there is no effect on consumers.
• D)states are no longer allowed to be members of the World Trade Organization.

---

Definitions:

Fixed Cost

are business expenses that remain constant regardless of the level of production or sales, such as rent or salaries.

Depreciation

The process of allocating the cost of tangible assets over their useful lives, reflecting wear and tear or obsolescence.

Discount Rate

The interest rate used to discount future cash flows to their present value, reflecting the time value of money.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales volume.