Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Domestic shoe producers will likely increase production due to reduced competition from imports.
B
Consumers will benefit from lower prices due to increased competition from foreign producers.
C
The overall quantity of shoes in the market will increase as a result of the tariff.
D
The quality of domestic shoes will improve as a result of reduced foreign competition.
Understanding the Answer
Let's break down why this is correct
Answer
When a tariff is imposed on imported shoes, it means that the government adds a tax to shoes coming from other countries. This makes imported shoes more expensive for consumers, which can lead them to buy more shoes made in their own country instead. As a result, domestic shoe manufacturers may benefit because they can sell more shoes without competition from cheaper imports. For example, if a pair of imported shoes costs $50 plus a $10 tariff, making it $60, while a domestic pair costs $55, many people might choose the domestic option. Overall, the tariff helps local businesses but can increase prices for consumers.
Detailed Explanation
When a tariff is added, imported shoes become more expensive. Other options are incorrect because Some might think that tariffs lower prices; It's a common belief that tariffs increase the total number of shoes available.
Key Concepts
Effects of Tariffs
Domestic Market Protection
Consumer Behavior
Topic
Effects of Tariffs on Markets
Difficulty
hard level question
Cognitive Level
understand
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