Suppose a Certain Country Imposes a Tariff on a Good

question 209

Multiple Choice

Suppose a certain country imposes a tariff on a good.Which of the following results of the tariff is possible?

• A)Consumer surplus decreases by $100;producer surplus increases by $100;and government revenue from the tariff amounts to $50.
• B)Consumer surplus decreases by $200;producer surplus increases by $100;and government revenue from the tariff amounts to $50.
• C)Consumer surplus increases by $100;producer surplus decreases by $200;and government revenue from the tariff amounts to $50.
• D)Consumer surplus decreases by $50;producer surplus increases by $200;and government revenue from the tariff amounts to $150.

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Definitions:

Exclusive Dealing

A contractual agreement in which one party grants another party the sole rights to sell or distribute its goods or services within a specified territory or market.

Agreement

A mutual understanding or arrangement between two or more parties regarding their respective rights and responsibilities.

Exclusive Dealing Agreements

Contracts that restrict a party from buying, selling, or promoting the goods or services of anyone other than the specified party, often used to solidify business relationships and ensure loyalty.

Reciprocal Dealing Agreements

Contracts where two parties agree to provide similar benefits or conditions to each other, typically in business contexts.