A country imposing a tariff can benefit in terms of social welfare if A. The terms-of-trade benefit exceeds the sum of production and consumption distortion loss. B. The tariff revenue exceeds the sum of production and consumption distortion loss. C. The consumer surplus loss is less than the producer surplus gain. D. The terms-of-trade benefit exceeds the consumer surplus loss. Explain Your answer using 200 words and a diagram

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
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A country imposing a tariff can benefit in terms of social welfare if

A. The terms-of-trade benefit exceeds the sum of production and consumption distortion loss.

B. The tariff revenue exceeds the sum of production and consumption distortion loss.

C. The consumer surplus loss is less than the producer surplus gain.

D. The terms-of-trade benefit exceeds the consumer surplus loss.

Explain Your answer using 200 words and a diagram

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Follow-up Question

If a country closes off to trade and notices that the number of firms in an industry doubles in size, what economic theory would help us explain this phenomenon?

A. Stolper-Samuelson.

B. Melitz.

C. Ricardian.

D. Cournot.

Explain your answer in up to 200 words and using a diagram

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