Import Duties Can Be Set to Encourage

question 46

Multiple Choice

Import duties can be set to encourage:

• A) increased imports based on sales volumes.
• B) local input.
• C) price-fixing.
• D) imports from other suppliers.
• E) all of the above.

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Definitions:

Elastic Supply

The responsiveness of the quantity supplied of a good or service to a change in its price, with a high elasticity indicating that supply can adjust quickly to price changes.

Subsidy

A financial contribution provided by the government to support or promote a particular economic activity or sector.

Elastic Demand

A market condition where the demand for a product changes significantly in response to changes in price.

Inelastic Supply

Refers to a market scenario where the quantity supplied does not change significantly when the price of the product changes.