Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Tariffs increase consumer welfare while decreasing producer welfare.
B
Tariffs decrease consumer welfare while increasing producer welfare.
C
Tariffs have no significant impact on consumer or producer welfare.
D
Tariffs equally increase both consumer and producer welfare.
Understanding the Answer
Let's break down why this is correct
Answer
Tariffs are taxes that a government places on imported goods, making those goods more expensive. When tariffs are applied, domestic producers may benefit because they can sell their products at higher prices without competition from cheaper imports. However, this often hurts consumers, as they have to pay more for goods, and their choices become limited because fewer imports are available. For example, if a country imposes a tariff on foreign cars, local car manufacturers might sell more cars, but consumers will have to pay higher prices than before. Overall, while tariffs can help producers, they usually lead to higher costs and reduced options for consumers in the market.
Detailed Explanation
Tariffs make imported goods more expensive. Other options are incorrect because Some might think tariffs help consumers by protecting jobs; It's a common belief that tariffs don't change anything.
Key Concepts
Tariff
Protectionism
Welfare Effects.
Topic
Effects of Tariffs on Markets
Difficulty
hard level question
Cognitive Level
understand
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