Note: Good A B C D E F G H I J Nominal rate 10% 5% 0% 30% 2% 2.5% 15% R0.50/unit 40% R2.50/unit Value R400 R600 R500 R300 R200 R400 R100 R400 (100 units) R200 R100 (10 units) * Specific tariff value for total units in parentheses, i.e. the total tariff revenue generated from importing the total number of units in parentheses. Transforming a specific tariff into an ad valorem tariff. (specific tariff/ value of an imported unit of the good)*100 => example: good H=> a total value of R400 is imported of good H. In total, 100 units were imported, which implies that each unit is valued at R400/ 100 = R4. The specific tariff is R0.50/unit. Therefore, the ad valorem tariff of good H is (R0.5/R4)*100 = 12,5% (a) Calculate the unweighted-average nominal tariff rate for Tarheelia. (b) Calculate the weighted-average nominal tariff rate for Tarheelia.
Note: Good A B C D E F G H I J Nominal rate 10% 5% 0% 30% 2% 2.5% 15% R0.50/unit 40% R2.50/unit Value R400 R600 R500 R300 R200 R400 R100 R400 (100 units) R200 R100 (10 units) * Specific tariff value for total units in parentheses, i.e. the total tariff revenue generated from importing the total number of units in parentheses. Transforming a specific tariff into an ad valorem tariff. (specific tariff/ value of an imported unit of the good)*100 => example: good H=> a total value of R400 is imported of good H. In total, 100 units were imported, which implies that each unit is valued at R400/ 100 = R4. The specific tariff is R0.50/unit. Therefore, the ad valorem tariff of good H is (R0.5/R4)*100 = 12,5% (a) Calculate the unweighted-average nominal tariff rate for Tarheelia. (b) Calculate the weighted-average nominal tariff rate for Tarheelia.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question

Transcribed Image Text:5. The nominal tariff rates on the 10 imports into the hypothetical country of Tarheelia, as well
as the total import value of each good, are:

Transcribed Image Text:Good
A
B
с
D
E
F
G
H
I
J
Nominal rate
10%
5%
0%
30%
2%
2.5%
15%
R0.50/unit
40%
R2.50/unit
Value
R400
R600
R500
R300
R200
R400
R100
R400 (100 units)
R200
R100 (10 units)
* Specific tariff value for total units in parentheses, i.e. the total tariff
revenue generated from importing the total number of units in parentheses.
Note:
Transforming a specific tariff into an ad valorem tariff: (specific tariff/ value of an imported unit of the good)* 100
=> example: good H=> a total value of R400 is imported of good H. In total, 100 units were imported, which
implies that each unit is valued at R400/ 100 = R4. The specific tariff is R0.50/ unit. Therefore, the ad valorem tariff
of good H is (R0.5/R4)*100 = 12,5%
(a) Calculate the unweighted-average nominal tariff rate for Tarheelia.
(b) Calculate the weighted-average nominal tariff rate for Tarheelia.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images

Knowledge Booster
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.Recommended textbooks for you


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON

Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education