When a Country Imposes Tariffs, It Is Likely to Cause

question 136

Multiple Choice

When a country imposes tariffs, it is likely to cause

• A) Increased quantities of imports.
• B) Higher prices for the import-competing goods.
• C) Lower prices for domestic production.
• D) Less expensive exports.

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Definitions:

Income Distribution

The way in which total income is shared among individuals or groups within a society.

Perfect Competition

A market structure characterized by a large number of small firms, identical products sold by all firms, freedom of entry and exit, and perfect information about prices and products.

P = MC

The condition where the price of a good equals its marginal cost, representing an equilibrium in perfect competition markets.

Technological Progress

The advancement in technology which increases production efficiency and leads to economic growth.