The deadweight loss of a tariff is a social loss because it promotes inefficient

Question

The deadweight loss of a tariff

is a social loss because it promotes inefficient use of national resources.

is a social loss because it reduces the revenue of the government.

is not a social loss because it merely redistributes revenue from one sector to another.

is not a social loss because it is paid for by rich corporations.

is not a social loss because it aids domestic consumers.

is a social loss because it promotes inefficient use of national resources.

is a social loss because it reduces the revenue of the government.

is not a social loss because it merely redistributes revenue from one sector to another.

is not a social loss because it is paid for by rich corporations.

is not a social loss because it aids domestic consumers.

Explanation / Answer

Dead weight loss shows the inefficiency of the country to maintain equilibrium by increasing tariffs which will also encourage local businesses to increase rates . This creates an unbalanced state where resources are not used efficiently because of the increase in rates. Hence it is a social loss because it promotes inefficient use of national resources.

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