Based on Figure 1, choose the correct statement. Assume that Nation 2 a small country and imposes a tariff on imports of X Figure 1. Partial equilibrium analysis effects of a tariff in Nation 2 P,(S) As B 0 C 10 M 20 30 40 50 60 70 80 1) Nation 2 faces a perfectly inelastic import supply at the world price of Pw = 2 and it can import any quantity of X. 2) Nation 2 faces a perfectly elastic import supply at the world price of Pw = 2 and it can import any quantity of X.
Based on Figure 1, choose the correct statement. Assume that Nation 2 a small country and imposes a tariff on imports of X Figure 1. Partial equilibrium analysis effects of a tariff in Nation 2 P,(S) As B 0 C 10 M 20 30 40 50 60 70 80 1) Nation 2 faces a perfectly inelastic import supply at the world price of Pw = 2 and it can import any quantity of X. 2) Nation 2 faces a perfectly elastic import supply at the world price of Pw = 2 and it can import any quantity of X.
Chapter12: The Partial Equilibrium Competitive Model
Section: Chapter Questions
Problem 12.8P
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Question
![Based on Figure 1, choose the correct statement. Assume that Nation 2 a small country and imposes a tariff on imports of X.
Figure 1. Partial equilibrium analysis effects of a tariff in Nation 2
P,($)
Ars
0
|A C
10
J
'M
*-
20
30
40
50 60
D,
70 80
1) Nation 2 faces a perfectly inelastic import supply at the world price of Pw = 2 and it can import any quantity of X.
2) Nation 2 faces a perfectly elastic import supply at the world price of Pw = 2 and it can import any quantity of X.
3) Nation 2 faces a perfectly elastic export supply at the world price of Pw = 1 and it can import any quantity of X.
4) Nation 2 faces a perfectly inelastic export supply at the world price of Pw = 1 and it can import any quantity of X.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcab27ebe-ca52-4065-95ad-a0b64c44780e%2F8e952283-6f63-4a22-8d22-d0de791a9975%2Fkv53gqk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Based on Figure 1, choose the correct statement. Assume that Nation 2 a small country and imposes a tariff on imports of X.
Figure 1. Partial equilibrium analysis effects of a tariff in Nation 2
P,($)
Ars
0
|A C
10
J
'M
*-
20
30
40
50 60
D,
70 80
1) Nation 2 faces a perfectly inelastic import supply at the world price of Pw = 2 and it can import any quantity of X.
2) Nation 2 faces a perfectly elastic import supply at the world price of Pw = 2 and it can import any quantity of X.
3) Nation 2 faces a perfectly elastic export supply at the world price of Pw = 1 and it can import any quantity of X.
4) Nation 2 faces a perfectly inelastic export supply at the world price of Pw = 1 and it can import any quantity of X.
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