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If a Tariff Decreases Domestic Consumption of a Good from 230

Question 100

Multiple Choice

If a tariff decreases domestic consumption of a good from 230 million units to 150 million units and raises the domestic price by $1.50, given a linear domestic demand curve and a perfectly elastic world supply curve, what is the value of the unexploited gains from trade caused by decreased domestic consumption?


A) $45 million
B) $60 million
C) $80 million
D) $120 million

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