Efficiency losses are A. deadweight losses caused by consumers being prevented by tariffs from buying products...

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Question

Efficiency losses are A. deadweight losses caused by consumers being prevented by tariffs from buying products...

Efficiency losses are

A.

deadweight losses caused by consumers being prevented by tariffs from buying products at the world price, products that they value more highly than that price.

B.

the total loss in consumer surplus from a tariff.

C.

the increase in producer surplus that is created by a tariff.

D.

the deadweight loss that is created because domestic firms have to charge higher prices to produce units of output than foreign firms would have to charge.

business economics

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Answer 1

Answer #1

Ans.- (D)

Efficiency loss is the the deadweight loss that is created because domestic firms have to charge higher prices to produce units of output than foreign firms would have to charge.

Other options can't be considered as efficiency loss.

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Answer 2

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Efficiency losses are A. deadweight losses caused by consumers being prevented by tariffs from buying products...

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