A major American knives producer makes its custom products out of a combination of domestic and foreign

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A major American knives producer makes its custom products out of a combination of domestic and foreign parts, especially steel.

a. If a custom knife sells for $216 and the value added is 30 percent, what is the value of imported parts?

b. If the country imposes a 15 percent tariff on steel, what happens to the price of the knife? What happens to the domestic consumption and imports?

c. What is the effective rate of protection?

d. If a 25 percent tariff is levied on custom knives, what is the effective rate of protection?

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International Economics

ISBN: 9781292433998

8th Global Edition

Authors: James Gerber

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Question Posted: Dec 10, 2023 10:39 AM

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A major American knives producer makes its custom products out of a combination of domestic and foreign

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a Value of Imported Parts If the value added is 30 percent of the total price then the remaining 70 percent represents the cost of inputs including im...View the full answer

International Economics

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