If economy is open to foreign trade of good X, imposing a tariff will reduce total surplus (total surplus being defined as consumer + producer surplus). Which of the following ideas best describes why we observe tariffs being use in practice? Basically, what is the effect of tarrifs? a. The government can be under political pressure to implement inefficient economic policy. b. The tariff revenue raised will outweigh efficiency losses. c. Economic analysis does not fully explain efficiency losses. d. Economic stability is not often a political incentive.
If economy is open to foreign trade of good X, imposing a tariff will reduce total surplus (total surplus being defined as consumer + producer surplus). Which of the following ideas best describes why we observe tariffs being use in practice? Basically, what is the effect of tarrifs? a. The government can be under political pressure to implement inefficient economic policy. b. The tariff revenue raised will outweigh efficiency losses. c. Economic analysis does not fully explain efficiency losses. d. Economic stability is not often a political incentive.
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
Problem 3CQQ
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If economy is open to foreign trade of good X, imposing a tariff will reduce total surplus (total surplus being defined as consumer + producer surplus). Which of the following ideas best describes why we observe tariffs being use in practice?
Basically, what is the effect of tarrifs?
a. The government can be under political pressure to implement inefficient economic policy.
b. The tariff revenue raised will outweigh efficiency losses.
c. Economic analysis does not fully explain efficiency losses.
d. Economic stability is not often a political incentive.
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