A government is considering placing tariffs, taxes, on imported goods. Write a cost-benefit analysis for the situation—with at least one benefit and one cost.(1 point)

Question

Responses

Domestic businesses would sell their goods better since the imported goods would cost more; however, consumers would be required to pay more for the goods.
Domestic businesses would sell their goods better since the imported goods would cost more; however, consumers would be required to pay more for the goods.

Domestic businesses would sell their goods better since the imported goods would cost more, and more domestic jobs would be created to meet the higher demand for domestic goods.
Domestic businesses would sell their goods better since the imported goods would cost more, and more domestic jobs would be created to meet the higher demand for domestic goods.

International trade would be unaffected since the number of goods imported would be the same; the price would just be different. As a result, this would not lead to domestic job creation.
International trade would be unaffected since the number of goods imported would be the same; the price would just be different. As a result, this would not lead to domestic job creation.

Consumers would be required to pay more for the goods, and there would be less trade with foreign countries since their goods would not sell as well.
Consumers would be required to pay more for the goods, and there would be less trade with foreign countries since their goods would not sell as well.
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Answer 1

Cost-Benefit Analysis of Implementing Tariffs on Imported Goods

Benefits:

1. Support for Domestic Businesses: Imposing tariffs on imported goods would increase their prices, making domestic products relatively cheaper and more attractive to consumers. This could lead to higher sales for domestic manufacturers, stimulating local economies.

2. Job Creation: With increased demand for domestic products due to higher prices on imports, companies may need to hire more employees to ramp up production. This could lead to an increase in domestic employment, reducing unemployment rates and boosting local economies.

Costs:

1. Increased Consumer Prices: One of the most immediate costs to consumers is that prices for imported goods will rise due to the tariffs. This can lead to higher overall costs for consumers, which may disproportionately affect low-income households.

2. Reduced International Trade: Tariffs can strain relationships with trading partners, potentially leading to retaliatory tariffs. This could result in decreased availability of certain imported goods, limiting consumer choices and harming businesses that rely on foreign imports for their supply chains.

In summary, while tariffs may provide significant benefits for domestic industries and job creation, they also pose notable risks of higher consumer prices and reduced international trade.