Which of the following refers to the extra cost of shifting to more expensive home production following the imposition of a tariff?
A)Production effect
B)Revenue effect
C)Deadweight loss
D)Producer surplus

Question

Quizplus · Accepted Answer

The extra cost of shifting to more expensive home production following the imposition of a tariff is known as the production effect, which corresponds to choice A. Revenue effect refers to the increase in government revenue due to the imposition of a tariff. Deadweight loss refers to the loss of consumer and producer surplus resulting from a market distortion. Producer surplus refers to the difference between the price received by a producer and the minimum price at which he or she would be willing to sell a good or service.

Which of the Following Refers to the Extra Cost of Shifting