If an Import-Competing Firm Is Imperfectly Competitive,then Under Free Trade

question 57

Multiple Choice

If an import-competing firm is imperfectly competitive,then under free trade an export tariff will ________ domestic market price,________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.

• A) increase; have no effect on; decrease; increase; decrease
• B) decrease; decrease; increase; decrease; have no effect on
• C) increase; have no effect on; increase; decrease; increase
• D) decrease; increase; decrease; increase; decrease
• E) have no effect on; have no effect on; decrease; increase; decrease

---

Definitions:

Marginal Revenue Product of Labor

The additional revenue generated by employing one more unit of labor, holding all other inputs constant.

Extra Revenue

Additional income generated through activities outside of a company's or individual's primary revenue stream.

Hiring Another Worker

The process of adding an additional employee to the workforce, typically in response to increased demand for a business's products or services.

Marginal Revenue Product

The extra income earned by utilizing an additional unit of a production input.