Refer to the Figure Below to Answer the Following Questions

question 44

Multiple Choice

Refer to the figure below to answer the following questions.
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve.world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 15.3.1
-Refer to Figure 15.3.1.The tariff _______ the domestic production of shirts in Canada by _______ per year.

• A)increases; 24 million
• B)increases; 8 million
• C)decreases; 8 million
• D)increases; 4 million
• E)decreases; 16 million

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Definitions:

Higher Wage

A payment for labor services that is above the average or minimum rate typically offered in the market or sector.

Derived Demand

Demand for a factor of production or input that arises from the demand for the final product it contributes to producing.

Marginal Productivity Theory

A principle in economics that suggests the payment to a factor of production (like labor or capital) corresponds to its marginal productivity, which is the additional output generated by one more unit of that factor.

Income Distribution

The way in which total income is shared among individuals or groups within a society.