Refer to the figure below to answer the following question. Figure 7.3.2
-Refer to Figure 7.3.2.The supply of peanuts in Canada is made up of Canadian grown peanuts and imported peanuts.Initially,Canada engages in free trade in the peanut market.Then Canada puts a quota on peanut imports.The graph shows the Canadian market for peanuts when the Canadian government puts a quota on peanut imports.The Canadian consumer surplus that is redistributed to Canadian producers is ________ and the quota creates a deadweight loss equal to ________.
A)area B + C + D + E;zero
B)area B + C + F;area D
C)area B;area D + E
D)area B;area C + E
E)area B + C + D;area E + F

Question

Refer to the figure below to answer the following question.  Figure 7.3.2
-Refer to Figure 7.3.2.The supply of peanuts in Canada is made up of Canadian grown peanuts and imported peanuts.Initially,Canada engages in free trade in the peanut market.Then Canada puts a quota on peanut imports.The graph shows the Canadian market for peanuts when the Canadian government puts a quota on peanut imports.The Canadian consumer surplus that is redistributed to Canadian producers is ________ and the quota creates a deadweight loss equal to ________.
A)area B + C + D + E;zero 
B)area B + C + F;area D 
C)area B;area D + E 
D)area B;area C + E 
E)area B + C + D;area E + F

Quizplus · Accepted Answer

The Canadian consumer surplus that is redistributed to Canadian producers is represented by area B, as this is the area by which the price increases for consumers, directly benefiting Canadian producers. The quota creates a deadweight loss equal to areas C + E, representing the loss in efficiency in the market due to the quota restricting the quantity of imports, leading to a loss in consumer and producer surplus that is not transferred to anyone else.

Refer to the Figure Below to Answer the Following Question