A Canadian tariff imposed on items that can be produced more cheaply abroad
A)benefits Canadians by making these goods cheaper.
B)makes the goods more expensive in foreign markets.
C)creates a deadweight loss.
D)equalizes the cost of production between Canada and foreign producers.
E)All of the above.

Question

Quizplus · Accepted Answer

A Canadian tariff imposed on items that can be produced more cheaply abroad will create a deadweight loss because it will restrict trade and ultimately reduce consumer surplus. It will not benefit Canadians by making the goods cheaper nor will it make the goods more expensive in foreign markets. It may equalize the cost of production between Canada and foreign producers, but this is not always the case.

A Canadian Tariff Imposed on Items That Can Be Produced