In the Large-Country Case, When a Tariff Is Imposed, the Country

question 76

Multiple Choice

In the large-country case, when a tariff is imposed, the country:

• A) sees a terms-of-trade gain.
• B) is able to increase the world price of the imported good.
• C) is going to experience an increase in consumer surplus.
• D) is going to experience a decrease in producer surplus.

---

Definitions:

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (asset, liabilities, and equity) in a balance sheet is represented as a proportion of the total account.

Operating Income

Earnings before interest and taxes (EBIT), representing the profits from a company's regular business operations excluding deductions of interest and taxes.

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Unearned Revenue

Income received by a company for services or products yet to be delivered or provided, often considered a liability until the service or product is delivered.