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Ohnei St. Louis
on Nov 05, 2024

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Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If the tariff is changed so that it is now ________, tariff revenue in this country will be zero.

A) $1
B) between $1 and $5
C) between $5 and $10
D) $10

Tariff Revenue

Income generated by a government from imposing import taxes on goods brought into the country.

Domestic Price

The price of goods or services within a country's borders, influenced by local supply and demand conditions.

Free Trade

refers to international trade left to its natural course without tariffs, quotas, or other restrictions.

  • Gain insight into the workings of tariff revenue and its response to variations in tariff rates.
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Angie FernandezNov 09, 2024
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