Question

Imposition of an import tariff leads to

Group of answer choices

reduction in consumer surplus

deadweight loss

efficiency loss

All of these are true

Answer 1

All of these are true.

In reduction in consumer surplus, cost of economy of consumer surplus as consumers have to pay higher prices to get product that they previously imported at lower price.

In dead weight loss, they prevent people from engaging in purchase they would otherwise make the final price which is above equilibrium market price.

Efficiency loss happens due to import tariffs.They raise the price of consumers , can lead retaliation to other countries. This discourage consumees to buy things from imported products.