High tariffs usually lead to black markets and smuggling. How is government revenue reduced by such activity?

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High tariffs usually lead to black markets and smuggling. How is government revenue reduced by such activity? Relate your answer to the graph in Exhibit 7 in this chapter. Does smuggling have any social benefits?

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Microeconomics A Contemporary Introduction

ISBN: 978-1111415921

9th edition

Authors: William A. McEachern

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Question Posted: Dec 12, 2015 05:30 AM

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High tariffs usually lead to black markets and smuggling. How is government revenue reduced by such activity?

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No tariffs are paid on smuggled goods so government revenues drop The amount of govern...View the full answer

Microeconomics A Contemporary Introduction

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