A ban on imports, a tariff, or a quota raises the price to domestic consumers. This means that consumers will buy less of the product at a higher price. The loss associated with this is called
A) production associated loss.
B) productive consumption loss.
C) consumption distortion loss.
D) consumer misperception loss.
C
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Explain what a "perfectly contestable" market means. Give an example of a perfectly contestable market. Explain why the outcome in a perfectly contestable market is that firms produce efficiently
What will be an ideal response?
When aggregate demand meets aggregate supply in the horizontal portion of the aggregate supply curve,
A) a decrease in demand will cause prices to rise but no change in output. B) a decrease in demand will cause output to rise but no change in prices. C) a decrease in demand will cause prices to fall but no change in output. D) a decrease in demand will cause output to fall but no change in prices.