Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Domestic production will increase as the tariff raises the price of imports.
B
Consumer surplus will increase since tariffs lower prices.
C
The quantity of imports will remain the same since tariffs do not affect trade.
D
Domestic consumers will have more choices because of the tariff.
Understanding the Answer
Let's break down why this is correct
Answer
When a country imposes a tariff on a good that it has been importing, the price of that good will usually increase in the domestic market. This happens because the tariff adds an extra cost to the imported goods, making them more expensive than before. As a result, consumers may buy less of that good because it is now pricier, and some people might switch to buying similar goods produced domestically. For example, if a country has been importing shoes at a low price but then adds a tariff, the price of those imported shoes will rise, leading people to consider buying shoes made in their own country instead. Overall, the tariff can protect local producers but may also lead to higher prices for consumers.
Detailed Explanation
When a tariff is added, it makes imported goods more expensive. Other options are incorrect because Some might think tariffs lower prices, but they actually raise them; It's a common mistake to think tariffs don't change imports.
Key Concepts
Effects of Tariffs on Trade
Supply and Demand Curves
Consumer and Producer Surplus
Topic
Effects of Tariffs on Trade
Difficulty
easy level question
Cognitive Level
understand
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