To measure the impact of a tariff on the total welfare of society, we
Calculate the:
A)rise in consumer surplus plus the rise in producer surplus.
B)rise in producer surplus plus the increase in tariff revenue going to the government minus the loss of consumer surplus.
C)rise in government revenues plus the rise in consumer surplus.
D)total number of jobs saved by the tariff times the average wage.

Question

Quizplus · Accepted Answer

Tariffs can impact the welfare of society by affecting producer and consumer surplus as well as government revenue. Choice B takes into account the increase in producer surplus due to the tariff, the increase in government revenue from the tariff, and the decrease in consumer surplus. This provides a more comprehensive measure of the impact of the tariff on society. The other choices do not account for all of these factors.

To Measure the Impact of a Tariff on the Total