Asked by Jalyn Froese on Apr 27, 2024
Verified
Domestic consumers gain and domestic producers lose when the government imposes a tariff on imports.
Domestic Consumers
People or family units in a nation who buy products and services for their own consumption.
Domestic Producers
Companies or individuals within a country that produce goods or services for the local market.
Tariff on Imports
A tax imposed by a government on goods and services imported from other countries, aiming to protect domestic industries.
- Examine how international trade affects the allocation of benefits and costs between producers and consumers in a country.
- Investigate the consequences of imposing tariffs and quotas on national prices, consumer and producer excess, and aggregate welfare.
Verified Answer
NB
Nafisha BarkerApr 29, 2024
Final Answer :
False
Explanation :
When a government imposes a tariff on imports, domestic producers generally gain because the tariff offers them protection from cheaper foreign competition, potentially increasing their sales and market share. Conversely, domestic consumers tend to lose because the tariff increases the price of imported goods, making them more expensive and reducing consumer choice and purchasing power.
Learning Objectives
- Examine how international trade affects the allocation of benefits and costs between producers and consumers in a country.
- Investigate the consequences of imposing tariffs and quotas on national prices, consumer and producer excess, and aggregate welfare.
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