Asked by
Ohnei St. Louis
on Nov 05, 2024Verified
Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If the tariff is changed so that it is now ________, tariff revenue in this country will be zero.
A) $1
B) between $1 and $5
C) between $5 and $10
D) $10
Tariff Revenue
Income generated by a government from imposing import taxes on goods brought into the country.
Domestic Price
The price of goods or services within a country's borders, influenced by local supply and demand conditions.
Free Trade
refers to international trade left to its natural course without tariffs, quotas, or other restrictions.
- Gain insight into the workings of tariff revenue and its response to variations in tariff rates.
Verified Answer
AF
Learning Objectives
- Gain insight into the workings of tariff revenue and its response to variations in tariff rates.