If Ecuador is considered a "small" country, a tariff will ______ increase its national welfare.
A) never
B) always
C) sometimes
D) only slightly

Question

Quizplus · Accepted Answer

A small nation, such as Ecuador, is a price taker in the global market and cannot affect the world price of gasoline. Therefore, imposing a tariff would only increase the price of gasoline for domestic consumers, leading to a decrease in consumer surplus and a deadweight loss, without any significant increase in national welfare.

If Ecuador Is Considered a "Small" Country, a Tariff Will