Figure 9-6

-Refer to Figure 9-6.The imposition of a tariff on carnations
A) increases the number of carnations imported by 100.
B) increases the number of carnations imported by 200.
C) decreases the number of carnations imported by 200.
D) decreases the number of carnations imported by 400.

Question

Figure 9-6
 
-Refer to Figure 9-6.The imposition of a tariff on carnations
A) increases the number of carnations imported by 100. 
B) increases the number of carnations imported by 200. 
C) decreases the number of carnations imported by 200. 
D) decreases the number of carnations imported by 400.

Quizplus · Accepted Answer

The imposition of a tariff on carnations decreases the quantity of imports by causing an increase in price, thus making carnations less attractive to the domestic market. The vertical distance between the world price and the new domestic price is equal to the amount of the tariff. In this case, the tariff raises the price of carnations by $1 per stem, causing a decrease in imported quantity by 200 stems.

Figure 9-6 -Refer to Figure 9-6.The Imposition of a Tariff on Carnations