The Figure Given Below Shows the Market for Shoes in the U.S

question 4

Multiple Choice

The figure given below shows the market for shoes in the U.S. The domestic price line with tariff lies above the international price line. D_d and S_d are the domestic demand and supply curves of shoes respectively. Following the imposition of tariff, the domestic producer surplus _____ by the area _____.

• A)increases; a
• B)decreases; a
• C)increases; (a + b)
• D)decreases; (a + b)

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Definitions:

Target

A predetermined goal or objective towards which efforts are directed.

Gaze

The act of looking steadily and intently, especially in admiration, surprise, or thought.

Frame for Reference

A set of criteria or stated values in relation to which measurements or judgments can be made.

Moving

The action or process of changing place or position, often applied to the physical act of relocating from one place to another.