Use the Following to Answer Questions

question 7

Multiple Choice

Use the following to answer questions:
Figure: Shirts
-(Figure: Shirts) Refer to the figure. If a $5 tariff was levied on shirts, how much tax revenue would the government collect?

• A) $0
• B) $100 million
• C) $200 million
• D) $375 million

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Definitions:

Good

A tangible item or service that can be bought, sold, or traded.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service and the actual amount they receive.

Tax

A necessary economic duty or another sort of imposition exacted from a taxpayer by a governmental agency to allocate funds for government activities and multiple public financial needs.

Good

A tangible item that satisfies some human want or need, which can be transferred from the producer to a buyer.