Exhibit 19-5
-If the country illustrated in Exhibit 19-5 is initially trading without restrictions at a world price of $1.00, the government revenue from a tariff of $0.50 per unit is represented by area

Question

Exhibit 19-5 
-If the country illustrated in Exhibit 19-5 is initially trading without restrictions at a world price of $1.00, the government revenue from a tariff of $0.50 per unit is represented by area

Quizplus · Accepted Answer

The government revenue from a tariff is represented by the area of the tariff per unit multiplied by the quantity of imports, which is typically shown as area 'e' in a supply and demand diagram with a tariff.

Exhibit 19-5 -If the Country Illustrated in Exhibit 19-5 Is Initially Trading