Exhibit 19.2

-Refer to Exhibit 19.2,which shows U.S.demand for and domestic supply of a good.Suppose the world price of the good is $1.00 per unit,and a specific tariff of $0.50 per unit is imposed on each unit of the imported good.In such a case,the loss of consumer surplus as a result of a tariff of $0.50 per unit is represented by area _____

Question

Exhibit 19.2
 
-Refer to Exhibit 19.2,which shows U.S.demand for and domestic supply of a good.Suppose the world price of the good is $1.00 per unit,and a specific tariff of $0.50 per unit is imposed on each unit of the imported good.In such a case,the loss of consumer surplus as a result of a tariff of $0.50 per unit is represented by area _____

Quizplus · Accepted Answer

The loss of consumer surplus as a result of the tariff is represented by the sum of areas c, e, f, and i. This is because the increase in domestic production decreases the quantity of imports and raises the domestic price, leading to a reduction in consumer surplus. Therefore, the correct answer is (C) c + i + e + f.

Exhibit 19.2 -Refer to Exhibit 19.2,which Shows U.S.demand for and Domestic Supply