Practice question · Match the pairs
Match each group to how a new import tariff affects it.
- Domestic producers
- Consumers
- The treasury
- The economy overall
- Lose: higher prices on all units
- Gain: shielded prices and market share
- Loses the deadweight triangles
- Gains revenue on remaining imports
Hints
- A tariff moves value between three groups and destroys some of it.
- Consumers pay; producers and the state collect.
Show the answer
- Domestic producers → Gain: shielded prices and market share
- Consumers → Lose: higher prices on all units
- The treasury → Gains revenue on remaining imports
- The economy overall → Loses the deadweight triangles
Why
A tariff redistributes from many consumers to few producers and the state, and burns a margin of value in the process.
Practise International Trade
The app has 6 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on International Trade
- Which statements about a trade deficit are correct?
- A country worse at producing everything than its partner still gains from trade. What makes that possible?
- Order the chain from specialization to shared gains.
- Sort each trade barrier by its type.
- A country is _less productive than its neighbor at everything_. What does trade theory conclude?
- A brilliant surgeon types faster than her receptionist and still hires one. Which trade principle is that, in…