Figure 19-2
Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.The loss in domestic consumer surplus as a result of the tariff is equal to the area

Question

Figure 19-2
  Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 19-2 shows the impact of this tariff.
-Refer to Figure 19-2.The loss in domestic consumer surplus as a result of the tariff is equal to the area

Quizplus · Accepted Answer

The loss in domestic consumer surplus as a result of the tariff is equal to the area C + D + E + F. This is because the tariff raises the price of rice in the domestic market, reducing the quantity demanded and causing a reduction in consumer surplus. The area B represents government revenue from the tariff, not a loss in domestic consumer surplus.

Figure 19-2 Suppose the U.S. Government Imposes a $0.40 Per