Assume that Japan is a large country and levies an "optimal tariff." Therefore,the tariff's terms of trade effect more than offsets the consumption and production losses and results in an overall welfare gain.

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An optimal tariff can result in a welfare gain for the country imposing it, as it would improve its terms of trade by raising the prices of its imports and reducing its imports, leading to a net gain in welfare. However, it would also lead to consumption and production losses, but if the terms of trade effect is strong enough, it can outweigh these losses and result in a net welfare gain.

Assume That Japan Is a Large Country and Levies an "Optimal