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WGU Global Economics for Managers Exam - Topic 1 Question 3 Discussion

An import tariff is implemented on furniture. What is the effect on consumer surplus for furniture?
A) It decreases.
B) It changes depending on market conditions.
C) It does not change.
D) It increases.

WGU Global Economics for Managers Exam - Topic 1 Question 3 Discussion

Actual exam question for WGU's Global Economics for Managers exam
Question #: 3
Topic #: 1
[All Global Economics for Managers Questions]

An import tariff is implemented on furniture. What is the effect on consumer surplus for furniture?

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Suggested Answer: A

An import tariff raises the domestic price of imported furniture, which reduces consumer surplus. Option A is correct. Consumer surplus is the difference between what buyers are willing to pay and what they actually pay. When a tariff increases the market price, consumers pay more and typically buy less. This reduces the benefit consumers receive from participating in the market. Domestic producers may gain producer surplus, and the government may collect tariff revenue, but consumers lose because prices rise and available choices may shrink. Option B is too weak because the standard tariff effect on consumer surplus is a decrease. Option C is wrong because tariffs change prices and quantities. Option D is the opposite of the expected effect. Tariffs redistribute welfare away from consumers.


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Cristal
7 hours ago
I practiced a similar question last week, and it indicated that tariffs typically reduce consumer surplus. I’m leaning towards A.
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Gail
5 days ago
I'm not entirely sure, but I feel like the impact on consumer surplus could vary based on how much the price increases. Maybe B is the right choice?
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Refugia
11 days ago
I remember discussing how tariffs generally lead to higher prices, which usually decreases consumer surplus. So I think A might be correct.
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Tasia
16 days ago
I feel like I’ve seen questions where the answer was that it depends on market conditions, but I lean towards it decreasing overall.
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Dylan
2 months ago
I’m a bit confused. Could it really not change at all? I thought tariffs always impacted consumer surplus negatively.
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Wenona
2 months ago
I remember a practice question about tariffs affecting prices, and it seemed like consumer surplus would drop because prices go up.
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Chana
2 months ago
I think the consumer surplus definitely decreases with an import tariff, but I'm not entirely sure if it could change based on other factors.
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