Use the following to answer questions :
Figure: A Tariff on Oranges in South Africa
-(Figure: A Tariff on Oranges in South Africa) Look at the figure A Tariff on Oranges in South Africa. When the government imposes a tariff on imported oranges, the price of oranges in South Africa rises from P_W to P_T and domestic consumer surplus _____ to _____.

Question

Use the following to answer questions :
Figure: A Tariff on Oranges in South Africa

-(Figure: A Tariff on Oranges in South Africa) Look at the figure A Tariff on Oranges in South Africa. When the government imposes a tariff on imported oranges, the price of oranges in South Africa rises from P_W to P_T and domestic consumer surplus _____ to _____.

Quizplus · Accepted Answer

When the price of oranges in South Africa rises due to the tariff, the domestic consumer surplus falls. This can be seen in the figure as a decrease in the area represented by F and L. Choice A correctly identifies the impact on consumer surplus, while choice B incorrectly states that consumer surplus falls by the sum of areas F, G, I, J, K, and L. Choices C and D incorrectly state that consumer surplus rises, which is not supported by the figure.

Use the Following to Answer Questions