-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S₁ represents the world supply curve. Suppose a free market exists. If a $1 per unit tariff is imposed on imported rice, the quantity of imported rice will decrease by

Question

-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S<sub>1</sub> represents the world supply curve. Suppose a free market exists. If a $1 per unit tariff is imposed on imported rice, the quantity of imported rice will decrease by A) 10 units. B) 20 units. C) 30 units. D) 40 units.

Quizplus · Accepted Answer

With the imposition of a $1 per unit tariff on imported rice, the world supply curve effectively shifts upwards by $1. This shift decreases the quantity of imported rice as the domestic market relies more on domestic supply, which is less affected by the tariff. The specific decrease in imported rice quantity (e.g., 20 units) would be determined by the difference in quantities imported before and after the tariff, based on the graphical representation of supply and demand curves and the shift caused by the tariff.

-The Above Figure Shows the Market for Rice in Japan