Post Utme Lautech 2023 Economics Question 21

Practice objective / multiple choice question 21 from the 2023 Post Utme Lautech Economics examination.

Post Utme Lautech 2023 Economics Objective / Multiple Choice
Question 21 POST_UTME_LAUTECH • 2023 • ECONOMICS • objective

The government of a country imposes a tax on imports to reduce the trade deficit. However, the tax also increases the \cost of production for domestic firms. U\sing the concept of opportunity \cost, explain why the government's decision to impose the tax may not be the most effective way to reduce the trade deficit.

Answer Options

Correct Answer A. The tax increases the opportunity \cost of producing goods domestically, making them less competitive in the global market.
B. The tax reduces the opportunity \cost of importing goods, making them cheaper for domestic consumers.
C. The tax has no effect on the opportunity \cost of producing goods domestically or importing goods.
D. The tax increases the opportunity \cost of importing goods, making them more expensive for domestic consumers.
Correct Answer
A
Correct Option:
The tax increases the opportunity \cost of producing goods domestically, making them less competitive in the global market.

About This Question

This is Post Utme Lautech 2023 Economics Question 21. It is one of the objective questions from the 2023 Post Utme Lautech Economics examination.

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