6. If Mexico imposes a tariff on lumber, then which of the following is NOT like

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6. If Mexico imposes a tariff on lumber, then which of the following is NOT likely to occur? a. Mexican imports of foreign lumber decrease. b. total surplus in the Mexican lumber market increases. e. producer surplus in the Mexican lumber market increases d. the domestic price of the good increases above the world price by the amount of tariff imposed. Figure#2: Price per Saddle Domestic Supply Tariff World Price Domestic Demand Q2 s 03 Q4 Quantity of Saddles d. C+D+E+F d. C+D+E+F 7. Refer to Figure #2. With the tariff, what are the areas that represents the loss of consumer surplus? b. E c. D+F 8 Refer to Figure #2. With the tariff what are a. the areas that represents the tariff revenue to the government? b. E c. D+F 9 Refer to Figure #2 a. what are the areas that represents the dead weight loss to the country? c. D + F With the tarif b. E d. C+D+E+F 10. Refer to a. With the tariff what are the area(s) that represent(s) the gain of the producer surplus? Figure #2 b. E c. D+F d. C+D+E+F 11. The term market failure refers to a market that fails to allocate resources efficiently. A market failure can NOT be caused a. too much of competition. b. externalities. c. market power. d. lack of property rights 12. An externality is the impact of one person's actions on the well-being of a bystander, of an externality? a. bad weather causes more hardship on farmers. b. cigarette smoke that permeates an entire restaurant. c. a beautiful flower garden outside of the local post office. d. a flu shot that prevents a student from transmiting the virus to her roommate. which of the following is NOT an example 13. When an externality is present, the market does not maximize the total benefit to society as a whole. Thus, all remedies for externalities share the goal of a. increasing the allocation of resources. c. decreasing the allocation of resources. b. moving the allocation of resources toward the socially optimal equilibrium. d. moving the allocation of resources toward the market equilibrium.

Explanation / Answer

First question is answered below

6.

Correct option: (b) total surplus in Mexican lumber market increases

Reason: Imposition of tax increases import price of lumber. This reduces consumer surplus more than it increases producer surplus and also leads to creation of deadweight loss. This implies total surplus falls with imposition of tariff.

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