When the World Price Is Below the Domestic Price, the Elimination

question 62

Multiple Choice

When the world price is below the domestic price, the elimination of a tariff decreases domestic production and provides a benefit because:

• A) it causes unemployment when workers are laid off.
• B) it makes producers better off.
• C) no one is harmed by the decreased production, and everybody pays lower prices.
• D) it frees up resources that can be used to produce other goods and services.

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Definitions:

Watershed

A geographical area where all water running off the land drains into a shared body of water, such as a river, lake, or ocean.

Floodplain Zone

An area of land adjacent to a stream or river which stretches from the banks of its channel to the base of the enclosing valley walls and experiences flooding during periods of high discharge.

Marine Organisms

Living creatures that inhabit the ocean or sea, including both plants and animals.

Nekton

Aquatic animals that can swim and move independently of water currents, including fish, whales, and squids.