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If Country I Is Trading in the Inelastic Range of Country

Question 19

Multiple Choice

If country I is trading in the inelastic range of country II's offer curve, then the imposition of a tariff by country I, which still leaves country I in the inelastic range of country II's curve, will (assuming no retaliation) lead to __________ in country I's terms of trade and to __________ in the volume of imports of country I.


A) a deterioration; a decrease
B) a deterioration; an increase
C) an improvement; a decrease
D) an improvement; an increase

Correct Answer:

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