When a tariff is placed on running shoes,the ________ to local businesses and local consumers are likely to be greater in dollar terms than the ________ to the owner of a shoe factory and its workers.
A)gains; gains
B)gains; losses
C)losses; gains
D)losses; losses

Question

Quizplus · Accepted Answer

When a tariff is placed on running shoes, the price of imported shoes increases, making them less competitive compared to locally produced shoes. Therefore, local businesses selling shoes and local consumers buying shoes have to pay more, resulting in losses for them. On the other hand, the owner of a shoe factory and its workers benefit from the tariff as they have less competition, resulting in gains for them. Hence, the losses to local businesses and consumers are likely to be greater in dollar terms than the gains to the owner of a shoe factory and its workers.

When a Tariff Is Placed on Running Shoes,the ________ to Local