Question:
Suppose a small country imposes an import tariff on a good. Which of the following statements is false?
Suppose a small country imposes an import tariff on a good. Which of the following statements is false?
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Who is helped and hurt by import tariffs?
Updated On: Feb 11, 2026
- Consumer surplus from the goods will decrease.
- Producer surplus from the goods will decrease.
- Producer surplus from the goods will increase.
- Decrease in quantity imported
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The Correct Option is B
Solution and Explanation
An *import tariff* increases the price of imported goods, which benefits domestic producers by increasing their market share and producer surplus.
However, consumer surplus will decrease as consumers pay higher prices, and the quantity imported will fall.
Therefore, the statement (b) is false. Hence, the correct answer is (b).
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