It Can Be Argued That Tariffs and Other Restrictions of Trade

question 48

Multiple Choice

It can be argued that tariffs and other restrictions of trade:

• A)lower the standard of living both in the initiator countries and those countries against which they are directed.
• B)usually lower the standard of living only in the countries that initiate them.
• C)usually lower the standard of living of only the countries against which they are directed.
• D)cause little welfare loss provided there is full employment both before and after the tariff.
• E)none of the above.

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Definitions:

Production Possibilities Frontier

A curve depicting all the possible combinations of two goods that can be produced within a given set of resources and technology level.

Marginal Utility

The extra pleasure or benefit derived from using an additional unit of a product or service.

Marginal Rates

The additional cost or benefit associated with a small incremental increase in a unit of activity.

Utilities Possibilities Frontier

A concept in economics that represents all possible allocations of utility or satisfaction among different goods and services for a particular consumer or society, graphically.