If it is desirable to enhance the incomes of factors used intensively in the import-competing industry, then a tariff would actually lower national welfare.

Question

Quizplus · Accepted Answer

A tariff on imports can protect the import-competing industry by making foreign goods more expensive, potentially increasing demand for domestic goods, enhancing the incomes of factors used intensively in this industry, and possibly improving national welfare through increased domestic production and employment, despite potential costs like higher consumer prices and inefficiencies.

If It Is Desirable to Enhance the Incomes of Factors