Mexico has imposed a tariff on the importation of chocolate. As a consequence of the tariff, a. Mexico as a whole is worse off, since the increase in producer surplus is smaller than the drop in consumer surplus plus tariff revenues. b. Mexico as a whole is better off, since the tariff results in tax revenue for the Mexican government. c. Mexico as a whole is better off, since the tariff increases employment and production in the domestic chocolate industry. d. Mexico as a whole is worse off, since producer surplus and consumer surplus both decrease..

A Tariff is a tax imposed by the government on goods and services imported from other countries thereby increasing the price and making import less desirable or at least less competitive against domestic goods and services. With the understanding of this definition, the government imposing tariff on importation of chocolate will definitely improve the economics of producing it locally and at the long run increase employment rate.