Figure 6-10 -Refer to Figure 6-10.A Price Floor Set at

question 26

Multiple Choice

Figure 6-10

-Refer to Figure 6-10.A price floor set at

• A) $6 will be binding and will result in a surplus of 8 units.
• B) $6 will be binding and will result in a surplus of 4 units.
• C) $16 will be binding and will result in a surplus of 12 units.
• D) $16 will be binding and will result in a surplus of 6 units.

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Definitions:

Specific Tariff

A fixed fee charged on a per unit basis for a good imported into a country.

Imported Good

A product or service that is brought into one country from another to be sold.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a product and the actual price they do pay.

Specific Tariff

A specific tariff is a fixed fee imposed by a government on each unit of imported or exported goods, rather than a percentage of their value.