Asked by The Broccoli Industry on May 12, 2024
Verified
Refer to Figure 4.5. Assume that initially there is free trade. The quantity of CD-Rom drives supplied by U.S. firms will increase by 3 million CD-Rom drives if the United States then imposes ________ tariff per CD-Rom drive on imported CD-Rom drives.
A) no
B) a $10
C) a $15
D) a $25
CD-Rom Drives
Devices that can read information stored on CD-ROMs, which are used for the digital storage of data.
Tariffs
Levies enforced by a government on goods that are imported or exported.
United States
A country located in North America, comprising 50 states, a federal district, five major self-governing territories, and various possessions.
- Assess the ramifications of tariffs and trade policies on home markets, including their impact on pricing, importation levels, and the demand and supply quantities of goods.
Verified Answer
AP
Anapat PararamanMay 17, 2024
Final Answer :
B
Explanation :
A tariff increases the price of imported goods, making domestic products more competitive. A $10 tariff would likely increase demand for U.S.-made CD-Rom drives, thus increasing the quantity supplied by U.S. firms.
Learning Objectives
- Assess the ramifications of tariffs and trade policies on home markets, including their impact on pricing, importation levels, and the demand and supply quantities of goods.