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 there's a net _____ to total surplus of _____.

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 there's a net _____ to total surplus of _____.

Quizplus · Accepted Answer

When the government imposes a tariff on imported oranges, the price of oranges within the domestic market increases from P_W to P_T. As a result, consumer surplus (area L) decreases by I + J. Producer surplus, on the other hand, increases by area K, as domestic suppliers will receive a higher price for their output. The net reduction to total surplus is I + K. Therefore, the best choice is C.

Use the Following to Answer Questions