To Measure the Impact of a Tariff on the Total

question 22

Multiple Choice

To measure the impact of a tariff on the total welfare of society, we
Calculate the:

• A)rise in consumer surplus plus the rise in producer surplus.
• B)rise in producer surplus plus the increase in tariff revenue going to the government minus the loss of consumer surplus.
• C)rise in government revenues plus the rise in consumer surplus.
• D)total number of jobs saved by the tariff times the average wage.

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Definitions:

Budgeted Amount

The total amount of money that has been allocated for a specific purpose or period of time.

Return on Assets

A financial ratio that measures the profitability of a company in relation to its total assets.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

Sales

The activities involved in selling products or services, ultimately generating revenue for a business.