Figure 17-12 If the country illustrated in Figure 17-12 is initially trading without restrictions at a world price of $1.00, net welfare loss as a result of a tariff of $0.50 per unit is represented by area

Question

Figure 17-12  If the country illustrated in Figure 17-12 is initially trading without restrictions at a world price of $1.00, net welfare loss as a result of a tariff of $0.50 per unit is represented by area

Quizplus · Accepted Answer

The net welfare loss due to a tariff of $0.50 per unit is represented by the deadweight loss area, which is the sum of areas i and f. Therefore, the correct choice is B.

Figure 17-12 If the Country Illustrated in Figure 17-12