When a Country Moves Away from a Free Trade Position

question 94

Multiple Choice

When a country moves away from a free trade position and imposes a tariff on imports,it causes

• A)a decrease in total surplus in the market.
• B)a decrease in producer surplus in the market.
• C)an increase in consumer surplus in the market.
• D)a decrease in revenue to the government.

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Definitions:

Amortization

The process of gradually writing off the initial cost of an asset over a period, typically for intangible assets.

Inventory Costing

An accounting method used to value inventory, commonly involving First-In, First-Out (FIFO), Last-In, First-Out (LIFO), or weighted average cost methods.

Equity Income

Equity income refers to earnings a company generates from its investments in the stocks of other companies, represented as a share of the profits from the equity interest.

Common Stock

Common Stock represents shares in a company that entitle holders to a share of the profits in the form of dividends and voting rights in certain company decisions.