Multiple Choice
Suppose that the free-trade price of a ton of steel is €500. (Note: € is the symbol for the euro, a common currency used in 19 European countries, including Finland.) Finland, a small country, imposes a €60-per-ton specific tariff on imported steel. With the tariff, Finland produces 300,000 tons of steel and consumes 600,000 tons of steel. What will happen to Finnish welfare losses if Finnish demand for steel increases and the quota remains unchanged?
A) They will decrease.
B) They will not change.
C) They will increase.
D) They will first increase, then decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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