In order to claim that a tariff and other forms of government intervention raise social welfare one must be able to demonstrate that
A) something prevents factors from shifting into industries that yield lower costs than are available in other sectors in the economy.
B) something prevents factors from shifting into industries that yield higher costs than are available in other sectors in the economy.
C) something prevents factors from shifting into industries that yield lower returns than are available in other sectors in the economy.
D) something prevents factors from shifting into industries that yield higher returns than are available in other sectors in the economy.
E) short term losses will be greater than long term gains.

Question

Quizplus · Accepted Answer

For a tariff or government intervention to raise social welfare, it must address a market failure that prevents resources from moving to industries with higher returns, thus justifying the intervention.

In Order to Claim That a Tariff and Other Forms