When the United States imposes a tariff on a good, the amount of the ________ in U.S. consumer surplus is ________ the amount of the ________ in U.S. producer surplus.

Question

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When a tariff is imposed, U.S. consumer surplus decreases because consumers pay higher prices. The decrease in consumer surplus is typically larger than the increase in producer surplus because tariffs create deadweight loss, which is the loss of economic efficiency.

When the United States Imposes a Tariff on a Good