The Production Component of the Deadweight Loss in a Small

question 22

Multiple Choice

The production component of the deadweight loss in a small nation arises with a tariff because

• A)some domestic resources are transferred from the production of an import-competing commodity to the more efficient use in the production of an exportable good.
• B)some domestic resources are transferred from a more efficient use to less efficient production of an importable commodity
• C)domestic producers are unhappy with the imposition of the tariff,and therefore refuse to produce a higher level of output.
• D)domestic producers allocate fewer resources into the production of the import-competing good than they should based on their costs.

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Definitions:

Domesticated

Refers to animals that have been tamed and bred in a human environment for work, companionship, or food; can also refer to plants adapted for human use.

Judgment

A legal decision made by a court following a lawsuit.

Appeals

The process of seeking a higher court's review of a lower court's decision in hopes of overturning or modifying the decision.

Garnishment

A legal process used by a creditor to collect a debt by seizing property of the debtor (such as wages) that is being held by a third party (such as the debtor’s employer).