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Figure: Costs of Tariffs
-(Figure: Costs of Tariffs) Refer to the figure. From left to right, the first triangle, rectangle, and second triangle in the diagram for analyzing a tariff represent:
A) unexploited gains from trade due to decreased domestic consumption, wasted resources from increased domestic production, and tariff revenues, respectively.
B) tariff revenues, wasted resources from increased domestic production, and unexploited gains from trade due to decreased domestic consumption, respectively.
C) wasted resources from increased domestic production, unexploited gains from trade due to decreased domestic consumption, and tariff revenues, respectively.
D) wasted resources from increased domestic production, tariff revenues, and unexploited gains from trade due to decreased domestic consumption, respectively.

Question

Use the following to answer questions:
Figure: Costs of Tariffs 
-(Figure: Costs of Tariffs) Refer to the figure. From left to right, the first triangle, rectangle, and second triangle in the diagram for analyzing a tariff represent:
A) unexploited gains from trade due to decreased domestic consumption, wasted resources from increased domestic production, and tariff revenues, respectively. 
B) tariff revenues, wasted resources from increased domestic production, and unexploited gains from trade due to decreased domestic consumption, respectively. 
C) wasted resources from increased domestic production, unexploited gains from trade due to decreased domestic consumption, and tariff revenues, respectively. 
D) wasted resources from increased domestic production, tariff revenues, and unexploited gains from trade due to decreased domestic consumption, respectively.

Quizplus · Accepted Answer

The first triangle represents wasted resources from increased domestic production, the second triangle represents unexploited gains from trade due to decreased domestic consumption, and the rectangle represents tariff revenues. This order is consistent with the conventional interpretation of the effects of a tariff.

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