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Government intervention

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Question 4

The diagram below shows the impact of a tariff imposed on imports of a specific agricultural good into a country, which increases the domestic price from the world price Pw P_w\,Pw​ to the tariff-inclusive price PtP_tPt​.

Domestic supply and demand curves with a tariff

Which area(s) represent(s) the net welfare loss (deadweight loss) to this domestic economy resulting from the introduction of the tariff?

HHH

I+KI + KI+K

I+J+KI + J + KI+J+K

H+JH + JH+J

Government intervention Questions

  1. A Level
  2. /Economics
  3. /Government intervention