When a tariff is imposed, there is always an additional loss.One loss
Occurs when production moves from more efficient foreign producers to
Less efficient domestic producers.This loss is the:
A)consumption loss.
B)efficiency transfer.
C)production loss.
D)Xfactor.

Question

When a tariff is imposed, there is always an additional loss.One loss
Occurs when production moves from more efficient foreign producers to
Less efficient domestic producers.This loss is the:
A)consumption loss.
B)efficiency transfer.
C)production loss.
D)X­factor.

Quizplus · Accepted Answer

The loss described in the question is the production loss. When a tariff is imposed, it increases the price of imported goods, making domestic production relatively more competitive. This causes production to shift from more efficient foreign producers to less efficient domestic producers, resulting in a loss of production efficiency. This is a well-known inefficiency associated with protectionist trade policies.

When a Tariff Is Imposed, There Is Always an Additional