While some countries might be better off (in terms of social surplus) from the imposition of a tariff, the world overall is always worse off (in terms of social surplus) when import tariffs are imposed.

Question

Quizplus · Accepted Answer

This statement is true according to the theory of comparative advantage, which states that when countries specialize in producing goods that they can produce most efficiently and trade with each other, both countries benefit and social surplus increases. Imposing tariffs disrupts this system and leads to a decrease in overall social surplus.

While Some Countries Might Be Better Off (In Terms of Social