The imposition of a tariff on widgets by the U.S. government is likely to:

Question

Quizplus · Accepted Answer

The imposition of a tariff on widgets will result in higher prices for foreign producers, making their products less competitive in the domestic market. Domestic consumers will have to pay higher prices for widgets, which will decrease their purchasing power and reduce the quantity demanded. As a result, the total quantity of widgets sold will decrease. However, some domestic producers may benefit from the tariff, increasing producer surplus. The net effect of the tariff on the economy will depend on the relative magnitudes of these opposing forces.

The Imposition of a Tariff on Widgets by the U