Refer to the information provided in Figure 33.4 below to answer the question(s) that follow. Figure 33.4
-Refer to Figure 33.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If the tariff is changed so that it is now ________, tariff revenue in this country will be zero.
A) $1
B) between $1 and $5
C) between $5 and $10
D) $10

Question

Refer to the information provided in Figure 33.4 below to answer the question(s) that follow.  Figure 33.4
-Refer to Figure 33.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If the tariff is changed so that it is now ________, tariff revenue in this country will be zero.
A) $1 
B) between $1 and $5 
C) between $5 and $10 
D) $10

Quizplus · Accepted Answer

If the tariff is $10, the price with the tariff would equal the domestic price of $20, eliminating imports and thus tariff revenue.

Refer to the Information Provided in Figure 33