In a largecountry case, an optimal tariff is one for which the
Termsoftrade gain exceeds the:
A)producer surplus.
B)increased price of the product imported.
C)deadweight loss.
D)consumer surplus.

Question

In a large­country case, an optimal tariff is one for which the
Terms­of­trade gain exceeds the:
A)producer surplus.
B)increased price of the product imported.
C)deadweight loss.
D)consumer surplus.

Quizplus · Accepted Answer

In a large-country case, an optimal tariff is set such that the terms-of-trade gain (the benefit from improved trade conditions) exceeds the deadweight loss (the loss of economic efficiency) resulting from the tariff.

In a Large­country Case, an Optimal Tariff Is One for Which

In a Largecountry Case, an Optimal Tariff Is One for Which