A problem encountered when implementing an "infant industry" tariff is that:
A. Domestic consumers will purchase the foreign good regardless of the tariff
B. Political pressure may prevent the tariff's removal when the industry matures
C. Most industries require tariff protection when they are mature
D. Labor unions will capture the protective effect in higher wages
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Tariffs are not defended on the ground that they:
A. Improve the terms of trade of foreign nations
B. Protect jobs and reduce unemployment
C. Promote growth and development of young industries
D. Prevent over-dependence of a country on only a few industries
The deadweight loss of a tariff:
A. Is a social loss since it promotes inefficient production
B. Is a social loss since it reduces the revenue for the government
C. Is not a social loss because society as a whole doesn't pay for the loss
D. Is not a social loss since only business firms suffer revenue losses
Which of the following is a fixed percentage of the value of an imported product as it enters the country?
A. Specific tariff
B. Ad valorem tariff
C. Nominal tariff
D. Effective tariff
A tax of 20 cents per unit of imported cheese would be an example of:
A. Compound tariff
B. Effective tariff
C. Ad valorem tariff
D. Specific tariff
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