Question

A small price-taking nation imports a good that it could not possibly produce itself at any finite orice. Can you describe plausible conditions under which that nation would benefit from an import tarrid on the good?

Answer 1

The nation is little when country forces a tarrif on imports contending with the yield of a little household industry then the tarrif will impact neither world costs nor the remainder of the economy.

The interest for item where tarrif is forced should be less versatile and more extreme because of this utilization impact will be less.Because the more flexible and compliment the interest for item the more prominent is the utilization impact (i.e decrease in household consumption).Similarly gracefully bend should likewise be less flexible .in light of the fact that the more versatile Supply bend is, the more noteworthy is the creation effect.Thus the more versatile interest and flexibly are in country ,the more prominent is the exchange impact of the tarrif (i.e more noteworthy is the decrease in country imports of a ware) and the littler is the income impact of the tarrif ( i.e the income gathered by the administration)