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- Subject
- Tariffseconomics-mcqs › tariffs
- Published
- 28 May 2019
- Last updated
- 28 May 2026
Under what circumstance can a nation’s welfare improve by imposing an import tariff?
Multiple choice question for Tariffs. Select an option, then review the explanation below.
Explanation
A country can experience an increase in welfare from an import tariff if the tariff sufficiently improves its terms of trade. This means the country gains more favorable prices on its imports relative to its exports. Being a small country usually limits this effect, and benefits to trading partners or increased government revenue do not necessarily translate into improved national welfare.
More Tariffs MCQs
Practice related questions from the same subject.
- 1.Under a free trade system, what is the total worth of imports?
- 2.What do empirical studies generally indicate about the nature of U.S. import tariffs?
- 3.Which of the following statements about government trade policies is NOT typically true?
- 4.If the nominal tariff on finished computers is 12% and the weighted average nominal tariff on the inputs for making computers is 18%, what can be said about the effective rate of protection for the computer sector?
- 5.If Pakistan applies a tariff on ballpoint pens consisting of 25 rupees per pen plus 12% of the pen's price, what type of tariff is this an example of?