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The Graph Shown Demonstrates the Domestic Demand and Supply for a Good

Question 105

Multiple Choice

The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good. The graph shown demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.   If the economy was previously operating in autarky, the decision to open to trade and impose a tariff will cause the economy to: A) decrease its consumption from 1,500 units to 1,150 units. B) increase its consumption from 815 units to 1,500 units. C) increase its consumption from 815 units to 1,150 units. D) decrease its consumption from 1,500 units to 815 units. If the economy was previously operating in autarky, the decision to open to trade and impose a tariff will cause the economy to:


A) decrease its consumption from 1,500 units to 1,150 units.
B) increase its consumption from 815 units to 1,500 units.
C) increase its consumption from 815 units to 1,150 units.
D) decrease its consumption from 1,500 units to 815 units.

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