Question

In: Economics

To produce a boat, you need wood as an intermediate good. If this country imports both...

To produce a boat, you need wood as an intermediate good. If this country imports both boats and wood, a 10% tariff rate can be imposed on boat imports, and a 5% tariff rate
can be imposed on wood imports. The price of a boat is $1000 before the tariff, and the price of one unit of wood is $100. Knowing that three units of wood are required to produce one boat.


(a) The value added before both tariffs are imposed =


(b) The value added after both tariffs are imposed =


(c) The value added after imposing a tariff on boats only =


(d) The value added after imposing the tariff on wood only =


(e) The effective rate of protection after imposing both tariffs =


(f) The effective rate of protection if only the tariff on boats is imposed =


(g) The effective rate of protection if only the tariff on wood is imposed =

Solutions

Expert Solution

Rahul Sunny answered 1 year ago
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