N 260 Figure#2 Price per Saddle Domestic Supply Tariff World P1 Domestic IIDeman

Question

N 260 Figure#2 Price per Saddle Domestic Supply Tariff World P1 Domestic IIDemand 0 01 02 0a 04 ntity of 25. Refer to Figure 02. With the tarif, what are the areas that represents the loss of consumor surplus? a C b. E 26. Refer to Figure W2. With the tariff, what are the areas that represents the tariff revense to the governnment? C. D+F 27. Refer to Figure W2. With the tariff, what are the areas that represents the dead weight loss to the country? a C d.C+DE+F 28. Refer to Figure W2. With the tariff, what are the areals) that represents) the gain of the producer sarplas? b. E d. C+D+E+F 29 The term market failare refers to a market that fails to allocateresources efficieatly. A market failure can NOYT be caned by atoo much of competition, b. externalities. c. market power d lack of property right. of le n esample anestenll is the inpast f one peno' a. bad weather causes more hardship on farmers. d. a flu shot that prevents a student from transmitting the virus to her roommate society as a whole. Thus, all remedies for externalities share the goal of b, cigarette smoke that permeates an entire restaurant e. a beautiful flower garden outside of the local post office. an externality is present, the market equilibrium is inefficient, and the equilbrium does not maxineize the total bencit to a. increasing the allocation of resources. e decreasing the allocation of resources. b. moving the allocation of resources toward the socially optimal equili d. moving the allocation of resources toward the market equilbrium RMUNNICHA

Explanation / Answer

25. Option d is correct (New consumer surplus = A + B , Old consumer surplus = A + B + C + D + E + F)

26. Option b is correct

27. Option c is correct

28. Option a is correct (Old PS = G , New PS = G + C)

29. Option a is correct ( Competition does not cause market failure)

30. Option a is correct (all other options are examples of an externality)

31. Option b is correct (goal is to move toward the socially optimal equillibrium)

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