Definition
- Tariff
- A tariff is a tax that a government places on imported goods and services, which makes imports more expensive for consumers.
- Not to be confused with: Deadweight loss
- Deadweight loss is the loss in social surplus that occurs when an economy produces at an inefficient quantity.
Test yourself
What is the difference between tariff and deadweight loss?
A tariff is the policy; deadweight loss is one of the welfare costs it creates.
Learn it properly: the module
Also in: Quotas and non-tariff barriers