Question

When the US imposes tariffs and other trade restrictions on imported goods,

Select one or more:

a. US producers gain monopoly power.

b.  the trade restrictions act as a barrier to entry.

c. US consumers will tend to pay higher prices and receive fewer goods than if trade restrictions were not in place.

d. there is a deadweight loss (a lower standard of living) for people in the country that imposed the trade restrictions.

e. all of the above.

Answer 1

The answer is (e) All of the above because all the options are likey to occur in case of import restrictions.

As there will be no or less competition from outside the domestic producers will have an added advantage.

The restrictions will act as a barrier to entry for new comers as well as existing producers

The US customers will have to pay higher prices for the same god as the taxes and tarrifs increase the price

There will be a loss and decrease in standard of living of people because they are buying foreign goods at higher or are not able to by them at all