If a Tariff Decreases Domestic Consumption of a Good from 230

question 100

Multiple Choice

If a tariff decreases domestic consumption of a good from 230 million units to 150 million units and raises the domestic price by $1.50, given a linear domestic demand curve and a perfectly elastic world supply curve, what is the value of the unexploited gains from trade caused by decreased domestic consumption?

• A) $45 million
• B) $60 million
• C) $80 million
• D) $120 million

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Definitions:

Bulimia

An eating disorder characterized by episodes of binge eating followed by purging to prevent weight gain, often through vomiting, fasting, or excessive exercise.

Binge Eating

Involves consuming large amounts of food in a short period of time, often associated with a loss of control over eating.

Long-Term Regulation

involves processes and mechanisms that maintain the stability of physiological systems over extended periods.

Fat Stores

Accumulated lipids within organisms, used for energy storage and insulation, and are a key factor in metabolic health.