In: Economics
1. Laptop computers are produced domestically and also imported. The price of laptop computers is $1000 and domestic producers use $600 of imported inputs per laptop computer produced at home. a) What will be the price of laptop computers if a 20% tariff is imposed on imports of finished laptop computers? _____________ b) What will be the domestic value added after tariff? ________________ c) What will be the effective rate of protection? _______________________ d) What will be the cost of input if along with a 20% tariff on finished computers, a 20% tariff is also imposed on imported inputs? ___________________________ e) What will be the value added when along with a 20% tariff on the finished computer, a 20% tariff is also imposed on imported inputs? __________ f) Based on information in part d) and e), what will be the new effective rate of protection on laptop computers? ___________