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JAMB Economics 1990 Question 41

Question 41

International Trade

Import duties will increase total expenditure on imports if the demand for imports is

  1. A.elastic
  2. B.inelastic
  3. C.infinitely elastic
  4. D.derived
Show the answer and explanation

Answer: B (inelastic)

Explanation

With inelastic demand the quantity bought falls only a little when the duty raises the price, so total spending goes up.