How does the imposition of a tariff reduce the price of imports?
A. At the lower quantity supplied, the price to the importer is lower than if there were free trade.
B. At the lower quantity demanded, the price to the importer is lower than if there were free trade.
C. Supply of the product is increased from domestic production, reducing the price of the imports.
D. Demand for the product is decreased, so that price must fall.
Answer: A
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Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The opportunity cost of one tomato is:
A. lower in Country A than Country B. B. higher in Country A than Country B. C. the same in both countries. D. impossible to calculate without more information.
Points that lie inside (or below) the PPF are
A) unattainable. B) attainable and productive efficient. C) attainable but productive inefficient. D) attainable and neither productive efficient nor productive inefficient.
Suppose that land and labor are substitute resources. If the wage rate rose, the employment of land would rise only if
A. the output effect outweighed the substitution effect. B. the substitution effect outweighed the output effect. C. the substitution effect was equal to the output effect.
Which of the following is an asset on the balance sheet of the Bank of Canada?
What will be an ideal response?