Exhibit 33-3

-Refer to Exhibit 33-3. The world price is P_W. If a tariff is imposed, the price rises to P_W + T. Because of the tariff, producers' surplus is __________ by an amount equal to the area of __________.

Question

Exhibit 33-3

Exhibit 33-3 -Refer to Exhibit 33-3. The world price is P<sub>W</sub>. If a tariff is imposed, the price rises to P<sub>W</sub> + T. Because of the tariff, producers' surplus is __________ by an amount equal to the area of __________. A) increased; 1 + 2 B) decreased; 1 C) increased; 3 + 4 D) increased; 1 E) decreased; 3

Exhibit 33-3 -Refer to Exhibit 33-3. The world price is P<sub>W</sub>. If a tariff is imposed, the price rises to P<sub>W</sub> + T. Because of the tariff, producers' surplus is __________ by an amount equal to the area of __________. A) increased; 1 + 2 B) decreased; 1 C) increased; 3 + 4 D) increased; 1 E) decreased; 3

-Refer to Exhibit 33-3. The world price is P_W. If a tariff is imposed, the price rises to P_W + T. Because of the tariff, producers' surplus is __________ by an amount equal to the area of __________.

Quizplus · Accepted Answer

A tariff increases the domestic price, benefiting domestic producers by increasing their surplus by the area between the world price and the tariff price, which is area 1.

Exhibit 33-3 ​

Exhibit 33-3