Figure 16.1 Import Tariff Levied by Venezuela

-Consider Figure 16.1. With a per-unit tariff of $3, Venezuela produces ______, consumes ______, and imports ______.

Question

Figure 16.1 Import Tariff Levied by Venezuela
 
-Consider Figure 16.1. With a per-unit tariff of $3, Venezuela produces ______, consumes ______, and imports ______.

Quizplus · Accepted Answer

With a per-unit tariff, domestic production increases due to the protection from cheaper imports, consumption decreases because of higher prices, and imports fill the gap between production and consumption. Choice A correctly shows an increase in domestic production to 40 calculators, a decrease in consumption to 80 calculators, and imports of 40 calculators to meet the demand.