The Graph Above Shows Domestic Supply and Demand with Trade

question 31

Multiple Choice

The graph above shows domestic supply and demand with trade in a SMALL country.With trade,this country can purchase at the world price,Pw.
Suppose that this country imposes a $5 per unit tariff on this good.Which of the following is true?

• A)The domestic price will rise by $5.
• B)Consumers will be better off.
• C)There will not be deadweight losses due to this tariff, since it is a small country.
• D)Producers will not increase domestic production.

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Definitions:

Political Parties

Organizations that aim to gain and maintain political power by nominating candidates, running campaigns, and outlining policies to appeal to the electorate.

War Of 1812

Conflict fought between the United States and Great Britain from 1812 to 1815, largely over issues of trade restrictions and impressment of American sailors by the British Navy.

War Of 1812

A military conflict between the United States and Great Britain from 1812 to 1815, primarily over British restrictions on U.S. trade and America's desire to expand its territory.

Treaty

A formal agreement between two or more sovereign states, usually regarding peace, alliances, trade, or other international relations.