-Refer to the diagram above.If this country imposes a tariff equal to $5 per pair of shoes,then compared to free trade,total economic surplus is ____________________ by ____________________ per year.

Question

Quizplus · Accepted Answer

A tariff generally reduces total economic surplus by creating deadweight loss. The $5 tariff reduces consumer surplus and increases producer surplus and government revenue, but the loss in consumer surplus exceeds the gains, resulting in a net loss of $3750 per year.

-Refer to the Diagram Above