-Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).The government collects tariff revenues on sugar imports in the amount of __________ million.
A) $500
B) $1,000
C) $1,500
D) $2,000
E) none of the above

Question

-Refer to Exhibit 34-8.Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports).The government collects tariff revenues on sugar imports in the amount of __________ million.
A) $500 
B) $1,000 
C) $1,500 
D) $2,000 
E) none of the above

Quizplus · Accepted Answer

The tariff revenue is equal to the tariff per ton multiplied by the quantity of sugar imported. From Exhibit 34-8, we can see that the quantity of sugar imported is 5 million tons. Therefore, the tariff revenue is $100 per ton * 5 million tons = $500 million.