Exhibit 19-4

-Refer to the graph in the exhibit.Suppose the country is initially trading without restrictions at a world price of $1.00.If the tariff is $0.50 per unit, what area represents the resulting government revenue?

Question

Exhibit 19-4
 
-Refer to the graph in the exhibit.Suppose the country is initially trading without restrictions at a world price of $1.00.If the tariff is $0.50 per unit, what area represents the resulting government revenue?

Quizplus · Accepted Answer

The government revenue from a tariff is represented by the area that corresponds to the tariff amount multiplied by the quantity of imports. In this case, area e represents the government revenue from the tariff.

Exhibit 19-4 -Refer to the Graph in the Exhibit.Suppose the Country Is