Exhibit 33-8

-Refer to Exhibit 33-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports). The government collects tariff revenues on sugar imports in the amount of __________ million.

Question

Exhibit 33-8
​
 
-Refer to Exhibit 33-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports). The government collects tariff revenues on sugar imports in the amount of __________ million.

Quizplus · Accepted Answer

The tariff revenue is equal to the tariff per ton multiplied by the quantity of sugar imported. The quantity of sugar imported is equal to the domestic demand minus the domestic supply. The domestic demand is 2,000 tons, and the domestic supply is 1,000 tons. Therefore, the quantity of sugar imported is 1,000 tons. The tariff per ton is $100. Therefore, the tariff revenue is $100 per ton * 1,000 tons = $100,000.

Exhibit 33-8 ​

Exhibit 33-8