Exhibit 19-3

-If the country illustrated in Exhibit 19-3 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 19-3
 
-If the country illustrated in Exhibit 19-3 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 that corresponds to the tariff per unit multiplied by the quantity of imports, which is typically shown as a rectangle on a supply and demand graph. In this case, area "e" represents the government revenue from the tariff.

Exhibit 19-3 -If the Country Illustrated in Exhibit 19-3 Is Initially Trading