Scenario: the Following Figure Shows the Demand Curve, D, and the Supply

question 181

Multiple Choice

Scenario: The following figure shows the demand curve, D, and the supply curve, S, of chairs in Barylia. Barylia is open to free trade. The world price of chairs is $3, and the government of Barylia decides to impose a $1 tariff on the import of chairs.

-Refer to the scenario above.What is the consumer surplus when Barylia engages in trade and the government imposes a $1 tariff on chairs?

• A) $100
• B) $120
• C) $180
• D) $200

---

Definitions:

Contract

A legally binding agreement between two or more parties that is enforceable by law.

Third-Party Beneficiary

An individual or entity that benefits from the terms of a contract, despite not being one of the principal parties involved in the agreement.

Incidental Beneficiary

A third party who unintentionally benefits from a contract made between two other parties, without having any enforceable rights under that contract.

Novation

A legal process where an old debt, obligation, or contract is replaced by a new one, effectively extinguishing the original agreement and substituting it with a new party or terms.