Question

Which of the following arguments would justify the imposition of a tariff on the import of processed food in Warzoa due to stiff competition from foreign producers?

A) To protect domestic industries and encourage local development.
B) To reduce consumer prices and increase affordability.
C) To promote international cooperation and trade agreements.
D) To encourage foreign investment and technological exchange.

Answer 1

The justification for imposing a tariff in Warzoa is to protect and allow the development of local industries, aligning with the infant industry argument.

Step-by-step explanation:

The argument that would justify the imposition of a tariff on the import of processed food in Warzoa due to stiff competition from foreign producers is To protect domestic industries and encourage local development. Tariffs are a traditional tool used mainly to shield domestic industries from international competition, providing them time to grow and become competitive. This argument aligns with the infant industry argument, which suggests blocking imports for a limited time to allow local industries to mature. While this might result in higher prices for domestic consumers, it's a strategic move to foster the development and establishment of domestic industries before they compete internationally.