Asked by Andrea Lopez on May 05, 2024
Verified
Refer to Figure 4.4. Assume that initially there is free trade. If the United States then imposes a $25 tariff per barrel of imported oil, the tariff revenue generated will equal
A) $25 million per day.
B) $50 million per day.
C) $100 million per day.
D) $125 million per day.
Tariff Revenue
Income earned by a government from imposing taxes on imported goods.
Imported Oil
Oil that is bought from other countries for use, reflecting dependency on foreign sources for energy supply.
- Examine the effects of governmental measures in markets, such as taxes and tariffs.
Verified Answer
ZK
Zybrea KnightMay 06, 2024
Final Answer :
B
Explanation :
The tariff revenue generated equals the tariff amount ($25) multiplied by the quantity of imports after the tariff is imposed. If the daily imports are 2 million barrels (as might be inferred from the context or figure not visible here), the revenue would be $25 * 2 million = $50 million per day.
Learning Objectives
- Examine the effects of governmental measures in markets, such as taxes and tariffs.
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