When a tariff is imposed, there is always an additional loss. One loss occurs when consumers purchase fewer units of the good because prices have risen, so society loses the value of that consumption. This loss is the:
A) consumption loss.
B) efficiency transfer.
C) production loss.
D) X-factor.

Question

Quizplus · Accepted Answer

When a tariff is imposed, prices of the imported good increase, which causes consumers to purchase fewer units of the good because it becomes more expensive. Therefore, society loses the value of that consumption, which is called the consumption loss.

When a Tariff Is Imposed, There Is Always an Additional