Suppose That a Tariff Increases Domestic Production of a Good

question 180

Multiple Choice

Suppose that a tariff increases domestic production of a good from 25 million units to 75 million units and raises the domestic price by $1.50. Assuming a linear domestic supply curve and a perfectly elastic world supply curve, what is the value of the resources wasted by increased domestic production?

• A) $37.5 million
• B) $50 million
• C) $75 million
• D) $150 million

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Definitions:

Nucleic Acid

Macromolecules essential to all known forms of life, which store and transmit genetic information in cells mainly in the forms of DNA and RNA.

RNA-First Hypothesis

In chemical evolution, the proposal that RNA originated before other macromolecules and allowed the formation of the first cell(s).

Enzymes

Biological molecules that significantly speed up the rate of virtually all of the chemical reactions that take place within cells.

Origin Of Life

The process by which living organisms emerged from non-living matter, the specifics of which are still under scientific investigation.