State whether each of the following statements is true or false. Justify for all statements and illustrate graphically/numerically whenever necessary. 1. The steeper the supply and demand curves for a certain commodity, the lower the trade and revenue effects of a tariff imposed on imports of such commodity. 2. With a positive nominal tariff on the final commodity, more of the commodity is produced domestically than would be under free trade. 3. If imported inputs constitute half the value of the final commodity and are admitted duty free, then the rate of effective protection is equal to the nominal tariff rate on the final commodity. 4. Export subsidies can be regarded as a form of dumping.
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Question 1:
State whether each of the following statements is true or false. Justify for all statements and illustrate graphically/numerically whenever necessary.
1. The steeper the
2. With a positive nominal tariff on the final commodity, more of the commodity is produced domestically than would be under free trade.
3. If imported inputs constitute half the value of the final commodity and are admitted duty free, then the rate of effective protection is equal to the nominal tariff rate on the final commodity.
4. Export subsidies can be regarded as a form of dumping.
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