-The above figure shows the market for rice in Japan. S₂ represents the domestic supply curve, and S₁ represents the world supply curve. A $1 per unit tariff has the same effect on producer and consumer surplus as a quota of

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. A $1 per unit tariff has the same effect on producer and consumer surplus as a quota of A) 10 units. B) 20 units. C) 30 units. D) 40 units.

Quizplus · Accepted Answer

The correct answer is A because a $1 per unit tariff and a quota of 10 units both reduce the quantity supplied by 10 units, which has the same effect on producer and consumer surplus.

-The Above Figure Shows the Market for Rice in Japan