A Country Is More Likely to Have Net Welfare Gains

question 80

Multiple Choice

A country is more likely to have net welfare gains when it imposes a tariff on a foreign monopolist if:

• A) the tariff is small.
• B) the tariff is large.
• C) the tariff revenues are large.
• D) the deadweight losses are large.

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Definitions:

Market Demand Curve

A graphical representation showing the quantity of goods consumers are willing and able to buy at various prices within a given timeframe.

Law of Demand

An economic principle stating that as the price of a good or service increases, the demand for it decreases, and vice versa, all else being equal.

Perfectly Competitive Markets

Markets characterized by many buyers and sellers, homogenous products, freedom of entry and exit, and perfect information, where no single participant can influence the market price.

Law of Demand

The principle that, all else being equal, as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa.