A Small Country Is Considering Imposing a Tariff on Imported

question 11

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 production effect of the tariff on wine is worth

• A)$250,000.
• B)$500,000.
• C)$2.5 million.
• D)$2.75 million.

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Definitions:

Hypotheses

Proposed explanations for a phenomenon, meant to be tested through experimentation or observation.

Instruments

Tools or devices designed for a specific purpose, especially scientific or musical.

Independent Variable

The factor in a controlled experiment that is being manipulated.

Experimenter

A person who conducts scientific tests and trials to explore hypotheses and examine the effects of variables.