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Figure: Foreign Trade Market
-(Figure: Foreign Trade Market) Refer to the figure. What is the dollar value of the deadweight loss created by the loss of foreign trade?
A) $10,000
B) $4,000
C) $36,000
D) $6,000

Question

Use the following to answer questions:
Figure: Foreign Trade Market 
-(Figure: Foreign Trade Market) Refer to the figure. What is the dollar value of the deadweight loss created by the loss of foreign trade?
A) $10,000 
B) $4,000 
C) $36,000 
D) $6,000

Quizplus · Accepted Answer

The deadweight loss is equal to the area of the shaded triangle, which can be calculated by multiplying 0.5 by the height of the triangle (4) by the base of the triangle (2,000). Therefore, the deadweight loss is $4,000.

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