Refer to the information provided in Figure 4.4 below to answer the question(s) that follow. Figure 4.4
-Refer to Figure 4.4. Assume that initially there is free trade. If the United States then imposes a $25 tariff per barrel of imported oil, the tariff revenue generated will equal
A) $25 million per day.
B) $50 million per day.
C) $100 million per day.
D) $125 million per day.

Question

Refer to the information provided in Figure 4.4 below to answer the question(s) that follow.  Figure 4.4
-Refer to Figure 4.4. Assume that initially there is free trade. If the United States then imposes a $25 tariff per barrel of imported oil, the tariff revenue generated will equal
A) $25 million per day. 
B) $50 million per day. 
C) $100 million per day. 
D) $125 million per day.

Quizplus · Accepted Answer

The tariff revenue generated equals the tariff amount ($25) multiplied by the quantity of imports after the tariff is imposed. If the daily imports are 2 million barrels (as might be inferred from the context or figure not visible here), the revenue would be $25 * 2 million = $50 million per day.

Refer to the Information Provided in Figure 4