The accompanying diagram illustrates the U.S. domestic demand curve and domestic supply curve for beef. The world price of beef is PW. The United States currently imposes an import tariff on beef, so the price of beef is PT. Congress decides to eliminate the tariff. In terms of the areas marked in the diagram, What is the gain/loss to the economy as a whole?
1) The loss to the economy as a whole is areas B + D
2) The gain to the economy as a whole is areas B + D.
3) The loss to the economy as a whole is areas A + C.
4) The gain to the economy as a whole is areas A + B + C + D.