Use the following to answer questions:
Figure: Shirts
-(Figure: Shirts) Refer to the figure. If a tariff raised the world price to $4 a shirt, how much deadweight loss would it create?
A) $5,000,000
B) $10,000,000
C) $120,000,000
D) $200,000,000

Question

Use the following to answer questions:
Figure: Shirts 
-(Figure: Shirts) Refer to the figure. If a tariff raised the world price to $4 a shirt, how much deadweight loss would it create?
A) $5,000,000 
B) $10,000,000 
C) $120,000,000 
D) $200,000,000

Quizplus · Accepted Answer

The deadweight loss is calculated based on the reduction in consumer and producer surplus due to the tariff. The correct calculation leads to a deadweight loss of $5,000,000.

Use the Following to Answer Questions