Solved

The Diagram Below Shows the Demand and Supply Curves for Refrigerators

Question 47

Multiple Choice

The diagram below shows the demand and supply curves for refrigerators in Canada. The diagram below shows the demand and supply curves for refrigerators in Canada.   FIGURE 33-1 Refer to Figure 33-1.Suppose P<sub>0 </sub>is the world price.If Canada imposes a tariff causing the price of refrigerators in Canada to rise from P<sub>0</sub> to P<sub>1</sub>,the Canadian government will collect tariff revenues equal to A) the original price P<sub>0</sub>,multiplied by the original quantity of refrigerators imported into Canada,Q<sub>1</sub>Q<sub>5</sub>. B) (P<sub>1</sub> - P<sub>0</sub>) multiplied by the tariff-induced quantity of refrigerators imported into Canada,Q<sub>1</sub>Q<sub>5</sub>. C) (P<sub>1</sub> - P<sub>0</sub>) multiplied by the tariff-induced quantity of refrigerators imported into Canada,Q<sub>2</sub>Q<sub>4</sub>. D) the new price,P<sub>1</sub>,multiplied by the total quantity of refrigerators purchased in Canada,Q<sub>4</sub>. E) the new price,P<sub>1</sub>,multiplied by the total quantity of refrigerators purchased in Canada,Q<sub>2</sub>. FIGURE 33-1 Refer to Figure 33-1.Suppose P0 is the world price.If Canada imposes a tariff causing the price of refrigerators in Canada to rise from P0 to P1,the Canadian government will collect tariff revenues equal to


A) the original price P0,multiplied by the original quantity of refrigerators imported into Canada,Q1Q5.
B) (P1 - P0) multiplied by the tariff-induced quantity of refrigerators imported into Canada,Q1Q5.
C) (P1 - P0) multiplied by the tariff-induced quantity of refrigerators imported into Canada,Q2Q4.
D) the new price,P1,multiplied by the total quantity of refrigerators purchased in Canada,Q4.
E) the new price,P1,multiplied by the total quantity of refrigerators purchased in Canada,Q2.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions