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, domestic consumption of domestically produced wallets will be ________ wallets and domestic consumption of imported wallets will be ________ wallets.
A) 150; 100
B) 150; 250
C) 100; 250
D) 200; 50

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, domestic consumption of domestically produced wallets will be ________ wallets and domestic consumption of imported wallets will be ________ wallets.
A) 150; 100 
B) 150; 250 
C) 100; 250 
D) 200; 50

Quizplus · Accepted Answer

With the tariff, the domestic price of a leather wallet is $15, which is higher than the world price of $10. As a result, domestic consumption of domestically produced wallets will increase, and domestic consumption of imported wallets will decrease. The correct answer is A) 150; 100.

Refer to the Information Provided in Figure 20