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:

Compounded Annually

Compounded Annually describes the process where interest is calculated on the principal sum and any accumulated interest from previous periods once a year.

Face Value

The nominal value stated on a financial instrument, such as a bond or stock certificate, representing its legal value.

Compounded Annually

The process where interest is calculated once per year on the initial principal, including all interest from previous periods.

Equal Annual Deposits

This term refers to a series of uniform payments made or received over a period, often used in the context of saving or investment strategies.