Suppose That There Is No Home Production of a Good

question 31

Multiple Choice

Suppose that there is no home production of a good (imports supply all home demand) . If the home country then applies a tariff to this good exported by a foreign monopoly, the price net of the tariff received by the foreign monopolist is:

• A) lower than under free trade.
• B) higher than under free trade.
• C) the same as under free trade.
• D) so high that no sales are possible.

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Definitions:

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the owner's claim against the company's assets.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, representing the wear and tear or usage.

Depreciating Equipment

The process of allocating the cost of tangible assets over its useful life, reflecting wear and tear, and loss of value over time.

Service Revenue

Income earned by a company for the services it has provided to customers.