The following diagram pertains to good X for country A, where D_A is the demand for X By A's consumers, S_A is the supply curve of X from A's home producers, S_B is the Horizontal supply curve of X to country A from country B, S_C is the horizontal supply Curve of X to country A from country C, and S'_B and S'_C are the horizontal supply curves From B and C, respectively, with a tariff in place. With the tariffs in place for both Countries B and C, imports of good X into country A are represented by distance__________.

Question

The following diagram pertains to good X for country A, where D<sub>A</sub> is the demand for X By A's consumers, S<sub>A</sub> is the supply curve of X from A's home producers, S<sub>B</sub> is the Horizontal supply curve of X to country A from country B, S<sub>C</sub> is the horizontal supply Curve of X to country A from country C, and S'<sub>B</sub> and S'<sub>C</sub> are the horizontal supply curves From B and C, respectively, with a tariff in place. With the tariffs in place for both Countries B and C, imports of good X into country A are represented by distance__________. A) OQ<sub>6 </sub> B) Q<sub>1</sub>Q<sub>6</sub> C) Q<sub>2</sub>Q<sub>5</sub> D) Q<sub>3</sub>Q<sub>4</sub>

Quizplus · Accepted Answer

With the tariffs in place, the supply curve from both country B and country C shift upward by the amount of the tariff. As a result, the price of good X increases by the amount of the tariff. This causes a decrease in imports of X into country A. In the diagram, the distance between Q₃ and Q₄ represents the decrease in imports due to the tariffs in place in countries B and C. Therefore, D is the correct answer.

The Following Diagram Pertains to Good X for Country A