Which of the following best describes the idea behind the "optimal tariff" concept under imperfect competition?
1
A country should set tariffs at a level that maximizes its import volume.
2
A country can improve its terms of trade and national welfare by imposing tariffs if it has market power in international trade.
3
Tariffs should be zero to ensure the most efficient allocation of resources.
4
A country should only impose tariffs to achieve specific domestic employment objectives.
5
Question Not Attempted