The Figure Below Illustrates a Tariff

question 134

Multiple Choice

The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. Figure 17-11
Refer to Figure 17-11. The tariff

• A) decreases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F.
• B) decreases producer surplus by the area C + D and decreases consumer surplus by the area D + E + F.
• C) increases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F.
• D) increases producer surplus by the area B + C and decrease consumer surplus by the area D + E + F.

---

Definitions:

Money Supply

The full measure of monetary assets within an economy, involving cash, coins, and balances in checking and savings accounts, at a specified moment.

Expansion

The process of a business or economy growing and increasing its production and activities.

Records

Documents, files, or electronic data that provide evidence of activities, transactions, or decisions, or can refer to vinyl discs used for playing music.

Business Cycle

The fluctuation in economic activity that an economy experiences over a period, characterized by periods of expansion and contraction.