Asked by Grant Friesen on May 02, 2024
Verified
Refer to Figure 4.5. Assume that initially there is free trade. If the United States then imposes a $10.00 tariff per CD-Rom drive on imported CD-Rom drives,
A) the quantity of CD-Rom drives demanded will be reduced by 6 million.
B) the quantity of CD-Rom drives supplied by U.S. firms will increase by 3 million.
C) the price of CD-Rom drives in the United States will decrease to $5.
D) U.S. imports of CD-Rom drives will increase by 3 million.
CD-Rom Drives
Devices that read information stored on Compact Discs, primarily used for retrieving, transferring, or storing digital data.
Tariffs
Levies applied by a government on imports from foreign countries, typically to safeguard local industries.
United States
A nation situated in North America, recognized for its vast economy and varied populace.
- Delve into the effect of tariffs and trade directives on domestic markets, including their implications for price fluctuations, import figures, and the quantities of goods being demanded and supplied.
Verified Answer
DB
Daria'una ButlerMay 08, 2024
Final Answer :
B
Explanation :
Imposing a tariff on imported CD-Rom drives makes imports more expensive, encouraging domestic production. As a result, the quantity of CD-Rom drives supplied by U.S. firms is likely to increase, reflecting a shift towards domestic sources to meet demand.
Learning Objectives
- Delve into the effect of tariffs and trade directives on domestic markets, including their implications for price fluctuations, import figures, and the quantities of goods being demanded and supplied.