The following image shows the market for wheat for the country of Palatino. S^D is the domestic supply of wheat, and D^D is the domestic demand for wheat. Suppose the world price of wheat is $9 per bushel. Suppose a specific tariff of $6 is imposed on each bushel of wheat imported. The net welfare loss from the tariff is represented by the area _____.
Figure 19.4

Question

The following image shows the market for wheat for the country of Palatino. S<sup>D</sup> is the domestic supply of wheat, and D<sup>D</sup> is the domestic demand for wheat. Suppose the world price of wheat is $9 per bushel. Suppose a specific tariff of $6 is imposed on each bushel of wheat imported. The net welfare loss from the tariff is represented by the area _____. Figure 19.4 A) A and C B) I and H C) B and D D) E E) F

Quizplus · Accepted Answer

The net welfare loss from the tariff is represented by the area B and D, which is the deadweight loss caused by the reduction in consumer surplus and producer surplus. Therefore, the best choice is C, which includes B and D.

The Following Image Shows the Market for Wheat for the Country