The Effect of a Tariff on a Foreign Monopolist Is

question 121

Multiple Choice

The effect of a tariff on a foreign monopolist is similar to a large nation imposing a tariff on a small nation. What is the implication for the welfare of the home nation?

• A) Only very large tariffs bring any benefit to the home nation.
• B) No tariffs are the best policy; all tariffs have a deadweight net loss.
• C) Small tariffs can be beneficial, but only to a certain point.
• D) The foreign producer may actually raise prices to make the tariff impossible to impose.

---

Definitions:

Society's Preference

The collective values and priorities of a community or population, often influencing policy and market trends.

Resources Available

Refers to the total means available for economic and operational development, such as raw materials, manpower, and capital.

Economic Perspective

Viewing issues through the lens of economics, focusing on how resources are allocated, used, and managed to meet needs and achieve objectives.

State Government

The government of a specified state within a country, responsible for local laws and policies distinct from the federal government.