Exhibit 18-4
-If the country illustrated in Exhibit 18-4 is initially trading without restrictions at a world price of $1.00, the government revenue from a tariff of $0.50 per unit is represented by area

Question

Exhibit 18-4 
-If the country illustrated in Exhibit 18-4 is initially trading without restrictions at a world price of $1.00, the government revenue from a tariff of $0.50 per unit is represented by area

Quizplus · Accepted Answer

The government revenue from a tariff is represented by the area that corresponds to the tariff per unit multiplied by the quantity of imports. In this case, area "e" represents the revenue collected from the tariff of $0.50 per unit.

Exhibit 18-4 -If the Country Illustrated in Exhibit 18-4 Is Initially Trading