Refer to the Graph Above, Where S_d and D_d Are

question 146

Multiple Choice

Refer to the graph above, where S_d and D_d are the domestic supply and demand curves for a product. The world price of the product is $6. If the economy is open to international trade but a per unit tariff of $4 is imposed, then the total revenue going to domestic producers would be:

• A) $400, the total revenue (after tariff) going to foreign producers would be $120, and the tariff revenue going to the government would be $80
• B) $240, the total revenue (after tariff) going to foreign producers would be $240, and the tariff revenue going to the government would be $80
• C) $400, the total revenue (after tariff) going to foreign producers would be $240, and the tariff revenue going to the government would be $80
• D) $240, the total revenue (after tariff) going to foreign producers would be $120, and the tariff revenue going to the government would be $120

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Definitions:

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning weights to each number.

Shares Outstanding

The total number of shares of a corporation that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Mill Rates

The amount of tax payable per dollar of the assessed value of a property, used in calculating local property taxes.

Assessed Value

The dollar value assigned to a property for purposes of taxation by the government.