The deadweight loss of a tariff:
A) Is a social loss since it promotes inefficient production
B) Is a social loss since it reduces the revenue for the government
C) Is not a social loss because society as a whole doesn't pay for the loss
D) Is not a social loss since only business firms suffer revenue losses

Question

Quizplus · Accepted Answer

The deadweight loss of a tariff is a social loss since it promotes inefficient production. This inefficiency comes from the fact that the production of the good now costs more (due to the tariff) than it would without the tariff. As a result, society as a whole loses out on potential gains from trade.

The Deadweight Loss of a Tariff