-Refer to Exhibit 9-5

question 114

Multiple Choice

-Refer to Exhibit 9-5.Imagine an AD curve intersecting an SRAS curve at Point L on graph (1) .Which point(s) would this correspond to on graph (2) ?

• A) A or B
• B) C
• C) D or E
• D) F
• E) G

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Definitions:

Tariff Revenue

Income that a government collects from imposing duties on imported goods.

Consumer Surplus

The divergence between the amount consumers are willing to pay for a product or service and the amount they actually pay.

Producer Surplus

Producer surplus is the difference between what producers are willing to accept for a good compared to what they actually receive, usually measured by the area above the supply curve and below the market price.

Total Surplus

The aggregate net advantage to society, encapsulated by both consumer and producer surplus within a market.