Figure 9-16

question 2

Multiple Choice

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price.
-Refer to Figure 9-16.The tariff

• A)decreases producer surplus by the area C,decreases consumer surplus by the area C + D + E,and decreases total surplus by the area D + F.
• B)increases producer surplus by the area C,decreases consumer surplus by the area C + D + E + F,and decreases total surplus by the area D + F.
• C)creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F.
• D)increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F.

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Definitions:

Producer Surplus

The difference between the amount producers are willing to accept for a good or service versus what they actually receive in the market.

Market Price

The ongoing value at which a commodity or service is offered for buy or sell in a trading environment.

Producer Surplus

The gap between the amount sellers are prepared to accept for a product and the actual selling price they obtain.

Crop Of Tomatoes

The product yield from cultivating tomatoes over a certain period or area.