Table 7.3.1
Canada's Market for Widgets

-Table 7.3.1 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, the domestic selling price will be ________ and quantity bought will be ________.
A)$6; 48 million
B)$7; 44 million
C)$8; 16 million
D)$8; 24 million
E)$8; 40 million

Question

Table 7.3.1
Canada's Market for Widgets
 
-Table 7.3.1 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, the domestic selling price will be ________ and quantity bought will be ________.
A)$6; 48 million 
B)$7; 44 million 
C)$8; 16 million 
D)$8; 24 million 
E)$8; 40 million

Quizplus · Accepted Answer

With a $1 tariff, the domestic price becomes $8 ($7 world price + $1 tariff). At this price, the quantity bought is 40 million.

Table 7.3.1 Canada's Market for Widgets