Question

Suppose the legislature of Louisville voted to impose a protective tariff on chicken. Which of the following would be true in the short-run? There will be a decrease in chicken production in Louisville. There will be a decrease in supply of chicken in Louisville. There will be an increase in chicken production by foreign nations.

Answer 1

II Only

Step-by-step explanation:

The choices that are included with this question are:

• I Only
• II Only
• III Only
• I and III only
• II and III only

The correct answer is that the protective tariff would initially lead to a decrease of chicken supply in Louisville. A protective tariff is a duty that countries impose on imports (products purchased from other countries) in order to raise their price. This makes such products less desirable to consumers, which means that consumers are more likely to buy national products. This is intended to protect domestic industries from foreign competition.

Answer 2

"There will be a decrease in the supply of chicken in Louisville." is true in short-run.

Explanation:

Protective tariffs are customs duties that benefit a domestic industry. They aim to make imports more expensive than domestically produced similar materials, which will lead to increased domestic sales of manufactured goods; supporting local industries.

For example, paper clips, bread canned vegetables, tobacco as well as jeans are products that depend on protection charges to survive.

Tariffs have unequal benefits. Because a tax is a tariff, as imports reach the home market the government will also see additional revenue. Domestic producers often benefit from a global downturn as rates of goods are artificially inflated.