Figure 7-2 Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff.
-Refer to Figure 7-2.The tariff revenue collected by the government equals
A)$10 million.
B)$15 million.
C)$19.875 million.
D)$35 million.

Question

Figure 7-2  Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff.
-Refer to Figure 7-2.The tariff revenue collected by the government equals
A)$10 million. 
B)$15 million. 
C)$19.875 million. 
D)$35 million.

Quizplus · Accepted Answer

The tariff revenue collected by the government is equal to the size of the tariff multiplied by the quantity of imports. In this case, the size of the tariff is $0.75 per pound and the quantity of imports is 20 million pounds, so the tariff revenue collected by the government is $15 million (0.75 x 20 million = 15 million).