Figure U.S.Imports from Mexico and Asia (Figure: U.S.Imports from Mexico and Asia) The $100 tariff by
The United States results in a tariff revenue of:
A)$25,000.
B)$5,000.
C)$50,000.
D)$2,500.

Question

Figure U.S.Imports from Mexico and Asia  (Figure: U.S.Imports from Mexico and Asia) The $100 tariff by
The United States results in a tariff revenue of:
A)$25,000. 
B)$5,000. 
C)$50,000. 
D)$2,500.

Quizplus · Accepted Answer

The $100 tariff will apply to each unit of imports from both Mexico and Asia. From the graph, we can see that the total quantity of imports from Mexico is 500 units and the total quantity of imports from Asia is 250 units. Therefore, the tariff revenue will be:

Tariff revenue = tariff per unit x total quantity of imports
Tariff revenue = $100 x (500 + 250) = $75,000

Thus, the correct answer is choice C.

Figure USImports from Mexico and Asia (Figure: U