Asked by
Kaylee Ochoa
on Dec 08, 2024
Verified
Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. After the tariff is imposed
A) domestic production and consumption will increase by 50 wallets and domestic consumption will increase by 50 wallets.
B) domestic production will increase by 150 wallets and domestic consumption will decrease by 250 wallets.
C) domestic production will increase by 100 wallets and domestic consumption will decrease by 100 wallets.
D) domestic production will increase by 50 wallets and domestic consumption will decrease by 50 wallets.
Domestic Consumption
The total demand for goods and services within a country, excluding those goods and services that are exported.
Domestic Production
The creation of goods and services within a country's borders.
Free Trade
An economic policy that allows imports and exports between countries with minimal governmental restrictions or duties.
- Acquire knowledge on the role tariffs play in affecting the prices and production volumes domestically.
Verified Answer
EC
Learning Objectives
- Acquire knowledge on the role tariffs play in affecting the prices and production volumes domestically.