Refer to the figure below to answer the following questions. Figure 7.3.1
The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
-Refer to Figure 7.3.1.Canadian consumers' ________ from the tariff is ________.
A)loss;$176 million
B)gain;$64 million
C)loss;$80 million
D)gain;$128 million
E)gain;$176 million

Question

Refer to the figure below to answer the following questions.  Figure 7.3.1
The figure shows the market for shirts in Canada,where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
-Refer to Figure 7.3.1.Canadian consumers' ________ from the tariff is ________.
A)loss;$176 million 
B)gain;$64 million 
C)loss;$80 million 
D)gain;$128 million 
E)gain;$176 million

Quizplus · Accepted Answer

The correct answer is A) loss; $176 million. Tariffs typically lead to higher prices for consumers, resulting in a loss of consumer surplus.

Refer to the Figure Below to Answer the Following Questions