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 how the tax affects the production possibilities frontier (PPF) of the country.

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The tax shifts the PPF inward, reducing the production possibilities of the country.

Post Utme Unilorin 2025 Economics Question 11

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 how the tax affects the production possibilities frontier (PPF) of the country.

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