Post Utme Pan Atlantic University 2023 Economics Question 26

Practice objective / multiple choice question 26 from the 2023 Post Utme Pan Atlantic University Economics examination.

Post Utme Pan Atlantic University 2023 Economics Objective / Multiple Choice
Question 26 POST_UTME_PAN-ATLANTIC_UNIVERSITY • 2023 • ECONOMICS • objective

A government imposes a tax on imports to reduce the trade deficit. However, the tax also leads to a decrease in the quantity of imports. U\sing the concept of opportunity \cost, explain why the tax may not be effective in reducing the trade deficit.

Answer Options

Correct Answer A. The tax increases the opportunity \cost of importing goods, leading to a decrease in imports.
B. The tax reduces the opportunity \cost of importing goods, leading to an increase in imports.
C. The tax has no effect on the opportunity \cost of importing goods.
D. The tax increases the opportunity \cost of producing goods domestically, leading to an increase in imports.
Correct Answer
A
Correct Option:
The tax increases the opportunity \cost of importing goods, leading to a decrease in imports.

About This Question

This is Post Utme Pan Atlantic University 2023 Economics Question 26. It is one of the objective questions from the 2023 Post Utme Pan Atlantic University Economics examination.

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