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Figure: Foreign Trade with a Tariff
-(Figure: Foreign Trade with a Tariff) Refer to the figure. A $1 tariff generates government revenue of:
A) $100 million.
B) $140 million.
C) $180 million.
D) $200 million.

Question

Use the following to answer questions:
Figure: Foreign Trade with a Tariff 
-(Figure: Foreign Trade with a Tariff) Refer to the figure. A $1 tariff generates government revenue of:
A) $100 million. 
B) $140 million. 
C) $180 million. 
D) $200 million.

Quizplus · Accepted Answer

The government revenue from a tariff is calculated by multiplying the tariff per unit by the quantity of imports. In this case, the $1 tariff is applied to 100 million units, resulting in $100 million in revenue.

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