This Graph Demonstrates the Domestic Demand and Supply for a Good,as

question 36

Multiple Choice

This graph demonstrates the domestic demand and supply for a good,as well as a tariff and the world price for that good.
According to the graph shown,the change to government revenue brought about by the imposition of the tariff to an economy once operating under free trade is:

• A)an increase of area JK.
• B)an increase of area FGJK.
• C)an increase of area IJKL.
• D)a decrease of area IL.

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Definitions:

Satisfaction

The fulfillment of one's wishes, expectations, or needs, or the pleasure derived from this.

Budget Line

An illustrative depiction of every possible pairing of two items that could be bought within a set budget at unchanging prices.

Slope

A measure of the steepness or incline of a line, often calculated as the ratio of the vertical change to the horizontal change between two points on the line.

Good A

A generic term often used in economics to describe a type of product or commodity.