Question

1. tariff that has the effect of limiting imports into a small country results in:

A. a net loss to the exporting country but a net gain for the world.

B. a net gain for the importing country and the world.

C. no overall change in consumption or the world price of the product that is the subject of the tariff.

D. a net loss to the importing country and the world.

2.

Tariffs make imports ____________________ in domestic markets and domestic products ____________________ in domestic markets.

A. less competitive; more competitive

B. more competitive; less competitive

C. less competitive; less competitive

D. more competitive; more competitive

3.

When a tariff is imposed on an imported product, the ___________________ represents those consumers who would have bought the product had the price of the product not increased as a result of the imposition of the tariff.

A. lost revenue

B. consumption effect

C. net national loss

D. deadweight loss

Answer 1

1) ans is D

Tariff leads to a net loss of the importing country and the world which is also knowm as dead weight loss.

2)ans is A

Tariff makes import relatively expensive leading imports to be less competitive and domestic products more competitive in domestic market because domestic product price remains same and becomes relatively cheaper compared to foreigner product compared to pre tariff.

3)ans is B

When a tariff is imposed, price becomes higher due to which now less consumer buy the goods leading to a consumption loss.