Refer to the Figure Below to Answer the Following Questions

question 123

Multiple Choice

Refer to the figure below to answer the following questions.

The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 31.3.1
-Refer to Figure 31.3.1. The tariff ________ the domestic production of shirts in Canada by ________ per year.

• A)increases; 8 million
• B)decreases; 16 million
• C)increases; 4 million
• D)decreases; 8 million
• E)increases; 24 million

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Definitions:

Incentive Function

The role of incentives or rewards in influencing individuals' or entities' behavior towards achieving certain goals or outcomes.

Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity supplied.

Land-Rent Taxes

Taxes imposed on the economic rent of land, aiming to capture the value generated by the inherent properties of the land itself without discouraging investment or development.

Economic Efficiency

A condition in which a market or an economy utilizes resources in a way that maximizes the production of goods and services.