Compared to the free trade equilibrium, when an import tariff is imposed on good X in a small country, then which of the following increase :
A. Domestic output of good X
B. Domestic demand of good X
C. Domestic price of good X
D. Domestic tariff revenue
Then the following is correct :
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Trade policy: tariffs, quotas and protection has come up 63 times in 6 exams since 2010.
This question is on Tariffs: welfare effects, optimum tariff and incidence, part of Trade policy: tariffs, quotas and protection in International Economics.
What a tariff does to prices, output, revenue and welfare in small and large countries.
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Question from the JNU SIS 2020 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.