Refer to the figure below to answer the following questions.

The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 7.3.1
-Refer to Figure 7.3.1,the Canadian government's revenue from the tariff is ________.
A)$64 million
B)$32 million
C)$128 million
D)$48 million
E)$480 million

Question

Refer to the figure below to answer the following questions.
  
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 7.3.1
-Refer to Figure 7.3.1,the Canadian government's revenue from the tariff is ________.
A)$64 million 
B)$32 million 
C)$128 million 
D)$48 million 
E)$480 million

Quizplus · Accepted Answer

The tariff is a tax on imported goods. The Canadian government's revenue from the tariff is equal to the amount of the tariff multiplied by the quantity of imported goods. In Figure 7.3.1, the tariff is $16 million per unit and the quantity of imported goods is 4 units. Therefore, the Canadian government's revenue from the tariff is $16 million x 4 units = $64 million.

Refer to the Figure Below to Answer the Following Questions