1. Assumption: Commodity F is final good, Commodity A and B are intermediate goods. It needs one unit A and one unit B to produce one unit F. Commodity A and B can be imported or locally produced. Under the condition of free trade, the price of F is US$1000, the price of A is US$500, the price of B is US$200. % (3) If the country impose 10% tax on final good F, 20% tax on commodity A, and 20% tax on commodity B. Calculate the effective protection rate of Commodity F.

1. Assumption: Commodity F is final good, Commodity A and B are intermediate goods. It needs one unit A and one unit B to produce one unit F. Commodity A and B can be imported or locally produced. Under the condition of free trade, the price of F is US$1000, the price of A is US$500, the price of B is US$200. % (3) If the country impose 10% tax on final good F, 20% tax on commodity A, and 20% tax on commodity B. Calculate the effective protection rate of Commodity F.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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