In a given country, automobiles industry sells a car for 20,000$ that has a cost in imported parts of 15,000$. To encourage domestic automobile industry, the country puts 20% tariff on imported cars. Also, the government is looking for revenues, thus the government impose a tariff of 10% on imported parts. What the rate of Effective Protection? What the rate of tariff that the government should impose to double the rate of effective protection?

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
Problem 2PA
icon
Related questions
Question
100%

Please, can you solve these questions, I tried to solve them but I couldn't do it because it is difficult?.

In a given country, automobiles industry sells a car for 20,000$ that has a cost in imported
parts of 15,000$. To encourage domestic automobile industry, the country puts 20% tariff on
imported cars. Also, the government is looking for revenues, thus the government impose a
tariff of 10% on imported parts. What the rate of Effective Protection? What the rate of tariff
that the government should impose to double the rate of effective protection?
Transcribed Image Text:In a given country, automobiles industry sells a car for 20,000$ that has a cost in imported parts of 15,000$. To encourage domestic automobile industry, the country puts 20% tariff on imported cars. Also, the government is looking for revenues, thus the government impose a tariff of 10% on imported parts. What the rate of Effective Protection? What the rate of tariff that the government should impose to double the rate of effective protection?
Expert Solution
steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Property Rights, Bargaining And The Coase Theorem
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
ECON MICRO
ECON MICRO
Economics
ISBN:
9781337000536
Author:
William A. McEachern
Publisher:
Cengage Learning
Economics:
Economics:
Economics
ISBN:
9781285859460
Author:
BOYES, William
Publisher:
Cengage Learning