The diagram shows the US as an open economy, trading with other countries around the world. In the absence of tariffs, the US produces million pounds of rice but consumes million pounds. This means the US imports million pounds of rice. To boost domestic production/supply of the crop, the US government imposed a $0.40 per pound tariff on rice imports. With the tariff, the new domestic price of rice is $ . Domestic output increases from million to million pounds. Rice imports fall by million pounds, The tariff hurts consumers. Consumer surplus decreases but producer surphus increases. The US government is able to generate revenue through the tariff. The total revenue accruing to the government as a result of the tariff is equal to the area marked The total revenue (in dollars) generated from the imposition of the tariff on rice is 5 million. This example shows that government intervention in the free market is not a zero-sum game. As can be seen from the diagmat, there is a loss to the US as a result of the tariff. The total loss as a result of the tariff is equal to the area(s) marked