Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
With a per-unit tariff of Pt?Pc, the total amount of tariff revenue collected on this product will be
A. Pa?Pt times y?w.
B. Pt?Pc times y?w.
C. Pt?Pc times z.
D. Pa?Pc times x.
Answer: B
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All of the following statements about the free market equilibrium output are equivalent except:
a. Total surplus is maximized. b. There is zero dead-weight loss. c. There are no allocations that a Pareto preferred. d. There is positive dead-weight loss.
If an excise tax is imposed on a product, consumer surplus and producer surplus for this good will most likely change in which of the following ways?
What will be an ideal response?
Contrast the effects of a U.S. tariff decrease and a U.S. tariff increase, ceteris paribus, on foreign exchange rates.
What will be an ideal response?
Select the graph below that best shows the change in the market specified in the following situation: In the market for chicken, when the price of a substitute, such as beef, decreases
Assume that the graphs show a competitive market for the product stated in the question.
A. Graph A
B. Graph B
C. Graph C
D. Graph D