Refer to the graph to answer this question. Based on the Tariff graph, which of the following statements is most true? A. Government revenue is reduced by a tariff. B. A tariff increases consumer surplus. C. A tariff reduces consumer surplus. D. A tariff increases imports.

Refer to the graph to answer this question. Based on the Tariff graph, which of the following statements is most true? A. Government revenue is reduced by a tariff. B. A tariff increases consumer surplus. C. A tariff reduces consumer surplus. D. A tariff increases imports.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 9RQ: In what ways (it) company investments in research and development create positive externalities?

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Question

Refer to the graph to answer this question. Based on the Tariff graph, which of the following statements is most true?

A. Government revenue is reduced by a tariff.

B. A tariff increases consumer surplus.

C. A tariff reduces consumer surplus.

D. A tariff increases imports.

Price
Smete only
P-$140
P120
Tariff
PS
A.
Imports with
a tariff
Quantity
(shoes)
without a
taritf

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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