Suppose Ecuador Imposes a Tariff on Imported Bananas

question 197

True/False

Suppose Ecuador imposes a tariff on imported bananas. If the increase in producer surplus is $50 million, the reduction in consumer surplus is $150 million, and the deadweight loss of the tariff is $30 million, then the tariff generates $130 million in revenue for the government.

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Definitions:

Bullwhip Effect

The phenomenon in supply chains where orders exhibit greater variance as one moves upstream in the chain, leading to inefficiency and excess inventory.

Supply Chain

A network of organizations, people, activities, information, and resources involved in moving a product or service from supplier to consumer.

Lack Of Coordination

The absence of harmonious operation or collaboration between groups or systems, often leading to inefficiency or disorder.

Hydrogen Ions

Positively charged ions (protons) of hydrogen that play a crucial role in chemical reactions and pH balance in biological systems.