Table 31.3.1
Canada's Market for Widgets

-Table 31.3.1 shows the Canadian supply of and demand for widgets. Widgets are available on the world market for $7. If the Canadian government imposes a tariff of $1, how many widgets will Canada import?
A)32 million
B)24 million
C)16 million
D)28 million
E)40 million

Question

Table 31.3.1
Canada's Market for Widgets
 
-Table 31.3.1 shows the Canadian supply of and demand for widgets. Widgets are available on the world market for $7. If the Canadian government imposes a tariff of $1, how many widgets will Canada import?
A)32 million 
B)24 million 
C)16 million 
D)28 million 
E)40 million

Quizplus · Accepted Answer

With a world price of $7 and a $1 tariff, the effective price is $8. At this price, the quantity demanded exceeds the quantity supplied domestically by 16 million widgets, which is the amount imported.

Table 31.3.1 Canada's Market for Widgets