When a country that imports a particular good imposes a tariff on that good, a. producer...
When a country that imports a particular good imposes a tariff on that good,
a. producer surplus increases and total surplus increases in the market for that good.
b. producer surplus decreases and total surplus decreases in the market for that good.
c. producer surplus decreases and total surplus increases in the market for that good.
d. producer surplus increases and total surplus decreases in the market for that good.
Homework Answers
Ans: d ) producer surplus increases and total surplus decreases in the market for that good.
Explanation:
When a country that imports a particular good imposes a tariff on that good, producer surplus increases due to rise in price . But consumer surplus decreases due to rise in price. As a result total surplus decreases in the market.
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