One of the MAIN Purposes of a Tariff Is To

question 161

Multiple Choice

One of the MAIN purposes of a tariff is to:

• A) raise the price of an import above the world price.
• B) compensate importers for losses due to fluctuating exchange rates.
• C) reduce the price of imports to make them more affordable.
• D) increase the supply of imports.

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Definitions:

Normal Profit

The minimum profit necessary for a company to remain competitive in the market, equating to the opportunity cost of the resources employed.

Normal Profit

The minimum level of profit necessary for a company to remain competitive in the market, often considered the break-even point.

Marginal Cost

Marginal cost is the increase in total cost that arises from producing one more unit of a good or service. It is a critical concept in economics for decision-making regarding production levels.

Purely Competitive Market

A market structure characterized by many buyers and sellers, all of whom are selling a homogeneous product, with no single buyer or seller able to influence the market price.