If a tariff is imposed on imports of shrimp into the United States,U.S.consumer surplus from shrimp will ________ and U.S.total surplus from shrimp will ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) increase; not change

Question

Quizplus · Accepted Answer

When a tariff is imposed on imports of shrimp, the price of shrimp for US consumers will increase. This will lead to a decrease in US consumer surplus as consumers have to pay a higher price for the same quantity of shrimp. Additionally, the decreased availability of imported shrimp will lead to a decrease in overall quantity of shrimp consumed, which will also decrease consumer surplus. The increase in producer surplus due to the tariff will not be enough to offset the decrease in consumer surplus, resulting in a decrease in total surplus. Therefore, U.S. consumer surplus from shrimp will decrease and U.S. total surplus from shrimp will decrease.

If a Tariff Is Imposed on Imports of Shrimp into the United