A Small Country Is Considering Imposing a Tariff on Imported

question 5

Multiple Choice

A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount: $$\begin{array} { l l } \text { World price of wine (free trade) : } & \$ 20 \text { per bottle } \\\text { Domestic production (free trade) : } & 500,000 \text { bottles } \\\text { Domestic production (after tariff) : } & 600,000 \text { bottles } \\\text { Domestic consumption (free trade) : } & 750,000 \text { bottles } \\\text { Domestic consumption (after tariff) : } & 650,000 \text { bottles }\end{array}$$ The imposition of the tariff on wine will cause the surplus of the domestic producers to _____ by _____.

• A)rise; $1 million
• B)rise; $500,000
• C)fall; $2.5 million
• D)rise; $2.75 million

Understand the concepts of marginal revenue product and its influence on labor demand.

Decode the significance of economic rent in differentiating the earnings of various jobholders.

Learn how to calculate real wages and understand their significance over time.

Recognize the influence of supply and demand in setting wage levels and economic rent.

---

Definitions:

Mental and Physical Fitness

A state of health and well-being in both the mind and the body.

Tai Chi

A form of Chinese martial arts characterized by slow, deliberate movements, meditation, and focused breathing techniques, often practiced for health and relaxation.

Flexibility

The ability of joints and muscles to move through their full range of motion.

Energy

The capacity to do work or the power derived from the utilization of physical or chemical resources, available in various forms such as kinetic, thermal, electrical, and chemical energy.