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The United States Has Imposed Taxes on Some Imported Goods

Question 197

Multiple Choice

The United States has imposed taxes on some imported goods that have been sold here by foreign countries at below their cost of production.These taxes


A) benefit the United States as a whole, because they generate revenue for the government.In addition, because the goods are priced below cost, the taxes do not harm domestic consumers.
B) benefit the United States as a whole, because they generate revenue for the government and increase producer surplus.
C) harm the United States as a whole, because they reduce consumer surplus by an amount that exceeds the gain in producer surplus and government revenue.
D) harm the United States as a whole, because they reduce the sum of consumer and producer surplus by an amount that exceeds the increase in government revenue.

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