Carefully explain why tariffs create deadweight losses. What ...

[melly21297]

Carefully explain why tariffs create deadweight losses.
 
  What will be an ideal response?

Question 2

Russia chose a slow approach to creating a private economy and China chose a fast approach.
 
  Indicate whether the statement is true or false

[Melissahxx]

Answer to Question 1

Tariffs reduce domestic consumption and increase domestic production. This means that some consumers that value this good more than its cost are not able to purchase it, which reduces consumer surplus without benefitting anyone. Likewise, domestic producers increase their production, but their costs are higher than world costs. Thus that additional cost of production does not benefit the producers; it is simply a waste of resources.

Answer to Question 2

FALSE

[melly21297]

Thank you

[Melissahxx]

No problemo