Difference between a nominal tariff and an effective tariff

Reference no: EM13731150

a) What is the difference between a nominal tariff and an effective tariff? What is the usefulness of the concept of effective protection?

b) Calculate the rate of effective protection, g, when t, nominal tariff on the final good, is 40 percent and the nominal tariff on Imported input is.

i) 20 percent

ii) 40 percent

iii) 60 percent

c. What general conclusion can you reach about the relationship between g and t?

Price of TV set	Quantitiy Demand	Quantitiy Supplied
*$ 500*	100	800
*400*	300	600
*300*	500	400
*200*	700	200
*100*	900

Suppose that instead of a quota, Australia grants its import competing producers a production subsidy of $50 per TV set

Reference no: EM13731150

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