Which of the following might be a reason that the consumption effect could be larger than...
Which of the following might be a reason that the consumption effect could be larger than the protective effect in the small nation import tariff model?
Group of answer choices
a) The domestic demand curve is more elsastic than the domestic supply curve
b) The domestic supply curve is more elastic than the domestic demand curve
c) The world supply curve is more elastic than the domestic demand curve
d) The domestic demand curve is more elastic than the world supply curve
Homework Answers
a) The domestic demand curve is more elsastic than the domestic supply curve
(Demand is more elastic than the uspply which results in greater consumption effect than the protective effect.)
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