Refer to the information provided in Figure 20.4 below to answer the question(s) that follow. Figure 20.4
-Refer to Figure 20.4. 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. After the tariff is imposed
A) domestic production and consumption will increase by 50 wallets and domestic consumption will increase by 50 wallets.
B) domestic production will increase by 150 wallets and domestic consumption will decrease by 250 wallets.
C) domestic production will increase by 100 wallets and domestic consumption will decrease by 100 wallets.
D) domestic production will increase by 50 wallets and domestic consumption will decrease by 50 wallets.

Question

Refer to the information provided in Figure 20.4 below to answer the question(s) that follow.  Figure 20.4
-Refer to Figure 20.4. 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. After the tariff is imposed
A) domestic production and consumption will increase by 50 wallets and domestic consumption will increase by 50 wallets. 
B) domestic production will increase by 150 wallets and domestic consumption will decrease by 250 wallets. 
C) domestic production will increase by 100 wallets and domestic consumption will decrease by 100 wallets. 
D) domestic production will increase by 50 wallets and domestic consumption will decrease by 50 wallets.

Quizplus · Accepted Answer

The tariff raises the price from $10 to $15, leading to an increase in domestic production and a decrease in domestic consumption, both by 50 wallets.

Refer to the Information Provided in Figure 20