Author Question: Consider a market in which there is an import tariff. Which of the following is TRUE? A) The lost ... (Read 34 times)

ETearle · **on:** Jun 29, 2018

Consider a market in which there is an import tariff. Which of the following is TRUE?

A) The lost consumer surplus equals the gain in producer surplus plus the government revenue plus the deadweight loss.
B) The lost consumer surplus equals the gain in producer surplus.
C) The lost consumer surplus equals the gain in producer surplus plus the government revenue.
D) The lost consumer surplus plus the deadweight loss equal the gain in producer surplus plus the government revenue.

Question 2

If demand for Farmer John's maple syrup is inelastic, then when Farmer John raises the price of maple syrup, his total revenue will

A) increase.
B) decrease.
C) stay the same.
D) probably change, but more information is needed to determine if the total revenue increases, decreases, or stays the same.