An optimal tariff is designed to limit imports to the point where which two factors are equal?

Multiple choice question for The International Economy And Globalization. Select an option, then review the explanation below.

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imports match exportsthe trade balance equals zerocurrency demand equals currency supplysocial marginal cost equals social marginal benefit

Explanation

An optimal tariff is set to reduce imports until the social marginal cost of importing equals the social marginal benefit, ensuring an efficient balance in trade policy.

Practice related questions from the same subject.

1.In which type of goods do Less Developed Countries (LDCs) typically hold a comparative advantage?
2.Why did output decline drastically in the economies undergoing transition?
3.When products are sold abroad at prices below the marginal cost of production and the marginal benefit to local consumers, which policy is most likely supporting this situation?
4.How do tariffs affect the production levels of domestic companies and the consumption habits of consumers?
5.The equilibrium exchange rate adjusts to neutralize disparities in which of the following international economic factors?

An optimal tariff is designed to limit imports to the point where which two factors are equal?

Explanation

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