commodity X can be imported from a foreign company, A, at $1,000. A rival domestic company manufactures a substitute for X, commodity Y, by importing the component parts worth $800. The final price of commodity Y after assembling is $1200. The nominal rate of tariff is 12 percent on the final product and 10 percent on the component parts. Determine the effective rate of protection. a. 24.1 b. 22.0 c. 6.7 d. 16.1

commodity X can be imported from a foreign company, A, at $1,000. A rival domestic company manufactures a substitute for X, commodity Y, by importing the component parts worth $800. The final price of commodity Y after assembling is $1200. The nominal rate of tariff is 12 percent on the final product and 10 percent on the component parts. Determine the effective rate of protection. a. 24.1 b. 22.0 c. 6.7 d. 16.1

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter35: International Trade Restrictions

Section: Chapter Questions

Problem 11E

See similar textbooks

Similar questions

2) Country X faces world prices for finished radios and radio components, which are 90 shillings and 80 shillings respectively. There is a 30% tariff on imported radios and 5% tariff on imported radio components. What is the effective rate of protection ( in percentage terms ) for the radio assembly industry in country X? What is the nominal rate of protection in the radio assembly industry?
The sales price of a TV set is 800$ and the value of imported input is 600$ a. Calculate the effective rate of protection if the government imposes a %25 tariff on imported TV sets.
With the $20 tariff, what is the 'new' price in the domestic contact lens market? Price Quantity Supplied Quantity Demanded World Price World Price + Tariff 0 0 240 100 120 20 20 220 100 120 40 40 200 100 120 60 60 180 100 120 80 80 160 100 120 100 100 140 100 120 120 120 120 100 120 140 140 100 100 120 160 160 80 100 120 180 180 60 100 120 200 200 40 100 120 220 220 20 100 120 240 240 0 100 120
If there are no tariffs on final goods but there is tariff on important inputs, effective rate of protection will be : (a) Infinite (b) Zero (c) Positive (d) Negative
Tariff is a tax levied on a particular foreign product entering a country.True or False
Is it legitimate to impose higher safety standards on imported goods that exist in the foreign country where the goods were produced?
To produce a car, you need steel as an intermediate good. If this country imports both cars and steel, a 25% tariff rate can be imposed on car imports, and a 10% tariff rate can be imposed on steel imports. The price of a car is $200 before the tariff, and the price of one unit of steel is $25. Knowing that two units of steel are required to produce one car: The effective rate of protection if only the tariff on steel is imposed=-0.033. The effective rate of protection if only the tariff on steel is imposed=0.3. The effective rate of protection if only the tariff on steel is imposed=0.333. The effective rate of protection if only the tariff on steel is imposed=D0.25.
1. Reciprocal Dumping in the absence of transport costs. Consider two countries, i {Spain, France}, each having the following inverse demand function: P = 20 – 2Q Assume that there is only one firm in each country with the following cost function: TC* = 2q Transport costs are absent. a) Start by considering a situation of autarky. Determine the equilibrium quantity and price in Spain. b) Compute total welfare in Spain under autarky (the sum of the consumer and producer surpluses). c) Now suppose that Spain opens up to international trade. Firms compete in quantities and transport costs are absent. In equilibrium determine (i) the quantity sold by the Spanish firm in Spain; (ii) the quantity sold by the French firm in Spain; (iii) the quantity sold by the Spanish firm in France; and (iv) the price of the good in Spain. d) Compute total welfare in Spain (the sum of the consumer and producer surpluses).
Australia requires that imported farm and mining machinery be subject to strict inspection measures. Some manufacturers refuse to trade with the country because the associated costs cut into their profits to the point where it just isn't worth it. Australia has created a nontariff barrier. True or False True False
The demand and supply functions for a product in two large countries are given as: Country A Country B Qd = 56 - 4P Qd = 110 – 4P Qs = -4 + 2P Qs = -10 + P The importing country imposes an ad valorem tariff of 20%. Calculate the change in consumer surplus, producer surplus, government revenue and social welfare after the imposition of tariff in the importing nation.
Nontariff barriers lower prices of both imports and import-competing goods Group of answer choices True False
25 20 15 10 5 0 S e) $13.5 -IP 0369 12 15 18 21 24 24. If the free trade price is IP and this country imposes a trade tariff of $3, what will be the resulting welfare loss to consumers? (Hint: the area of a triangle is 1/2 the base times the heigh O a) $3 Ob) $40.5 O c) SO O d) $27