The change in the economic welfare of a country associated with an increase in a tariff equalsA) efficiency loss - terms of trade gain.B) efficiency gain - terms of trade loss.C) efficiency loss + tax revenue gain.D) efficiency loss + tax revenue gain + terms of trade gain.E) efficiency loss - tax revenue gain.

1. The efficiency case made for free trade is that as trade distortions such as tariffs aredismantled and removedA) government tariff revenue will decrease, and therefore national economic welfare willdecrease.B) government tariff revenue will decrease, and therefore national economic welfare willincrease.C) deadweight losses for producers and consumers will decrease, hence increasing nationaleconomic welfare.D) deadweight losses for producers and consumers will decrease, hence decreasing nationaleconomic welfare.E) government tariff revenue will increase, hence increasing national economic welfare.

Tariffs are __________ by governments to make domestically produced goods more attractive and to raise revenue.*1 pointliftedputimposed

In the country levying the tariff, the tariff willA) increase both consumer and producer surplus.B) decrease both the consumer and producer surplus.C) decrease consumer surplus and increase producer surplus.D) increase consumer surplus and decrease producer surplus.E) decrease consumer surplus but leave producers surplus unchanged

2. Import substitution policies make use ofA) tariffs that discourage goods from entering a country.B) quotas applied to goods that are shipped abroad.C) production subsidies granted to industries with comparative advantage.D) tax breaks granted to industries with comparative advantage.E) production facilities provided by industrialized countries

The main redistribution effect of a tariff is the transfer of income fromA) domestic producers to domestic buyers.B) domestic buyers to domestic producers.C) domestic producers to domestic government.D) domestic government to domestic consumers.E) foreign producers to domestic consumers.