The Diagram Below Shows Supply and Demand Curves for Bicycles

question 53

Multiple Choice

The diagram below shows supply and demand curves for bicycles in the domestic Canadian market. Assume that all bicycles are identical.
FIGURE 34- 4
-Refer to Figure 34- 4. Suppose the world price of bicycles is $200 and Canada has in place a 50- percent import tariff on this good. The Canadian government will collect tariff revenue in the amount of _ _ per year.

• A)$1.5 million
• B)$0.5 million
• C)$2.5 million
• D)$1.0 million
• E)$2.0 million

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Definitions:

Labor

Labor represents the human effort, both physical and intellectual, used in the production of goods and services.

Maximize Utility

An economic principle where individuals or firms aim to achieve the highest satisfaction or profit from their choices.

Households

Units consisting of one or more people who live in the same dwelling and share meals or living accommodation; considered as a single entity for economic analysis.

Satisfaction

The feeling of fulfillment or pleasure derived from achieving a goal, satisfying a desire, or meeting a need.