Suppose that production of steel in the United States involves negative externalities. Now suppose that U.S. tariffs on steel imports are eliminated and U.S. imports of steel increase. What effect does the elimination of these tariffs have on the total social costs associated with steel production in the United States? A. Total social costs will increase. B. Total social costs will not change. C. Total social costs will decrease. D. Total social costs will increase but may be smaller than the private gains from increased steel imports.

Suppose that production of steel in the United States involves negative externalities. Now suppose that U.S. tariffs on steel imports are eliminated and U.S. imports of steel increase. What effect does the elimination of these tariffs have on the total social costs associated with steel production in the United States? A. Total social costs will increase. B. Total social costs will not change. C. Total social costs will decrease. D. Total social costs will increase but may be smaller than the private gains from increased steel imports.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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