Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
True
B
False
Understanding the Answer
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Answer
Tariffs are taxes placed on imported goods, making them more expensive. When tariffs are imposed, domestic producers can sell their goods at higher prices because foreign products cost more. This encourages local production since people are likely to buy more from local businesses instead of paying the higher prices for imports. However, consumers face higher prices and have fewer choices, which reduces their surplus, meaning they get less value from their purchases. For example, if a country imposes a tariff on imported shoes, local shoe manufacturers might produce more shoes, but consumers will pay more for them than they would for the cheaper imported options.
Detailed Explanation
Tariffs can help local businesses by making imported goods more expensive. Other options are incorrect because The idea that tariffs always boost local production is a common mistake.
Key Concepts
Tariffs and their impact on domestic markets
Consumer surplus and demand shifts
International trade dynamics
Topic
Effects of Tariffs on Markets
Difficulty
medium level question
Cognitive Level
understand
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