Which of the following is FALSE?
A)Consumer surplus increases after a tariff is placed on imports.
B)Producer surplus increases after a tariff is imposed.
C)Government revenue increases after a tariff is imposed.
D)Deadweight losses result from tariffs.

Question

Quizplus · Accepted Answer

Consumer surplus actually decreases after a tariff is placed on imports because the price for the imported good increases. Tariffs benefit domestic producers as producer surplus increases, and the government as government revenue increases. However, there are deadweight losses associated with tariffs, as they decrease the overall efficiency of the market and reduce total surplus.

Which of the Following Is FALSE