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In Order for Large Countries to Successfully Use Tariffs to Increase

Question 2

Multiple Choice

In order for large countries to successfully use tariffs to increase well being,


A) they must have significant market power so that foreign firms will cut prices to preserve their sales.
B) the deadweight loss created by the tariff must be greater than the government revenue the tariff generates.
C) domestic production must increase more significantly than for the small country case.
D) domestic consumption and imports must decrease more significantly than in the small country case.

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