Economics · International Trade
The optimum tariff is defined as the tariff rate that:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1minimizes the net benefit resulting from the improvement in a nation's terms of trade against the positive effect of trade volume expansion
- 2maximizes the net benefit resulting from the improvement in a nation's terms of trade against the negative effect of a reduction in trade volume✓
- 3does not maximize the net benefit resulting from the improvement in a nation's terms of trade against the negative effect of trade volume reduction
- 4maximizes the total revenue of the government irrespective of trade volume changes
Correct answer
maximizes the net benefit resulting from the improvement in a nation's terms of trade against the negative effect of a reduction in trade volume
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