In 2006, European Union Tariff on Imported Bananas from Latin

question 164

Multiple Choice

In 2006, European Union tariff on imported bananas from Latin America was €176 a ton. Suppose
2) 5 million tons of bananas were imported in 2006 but then the tariff decreased to €152 a ton in 2007 and as a result, 3 million tons were imported in 2007. What is the tariff revenue in 2007?

• A) €375,000,000
• B) €528,000,000
• C) €440,000,000
• D) €445,000,000

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Definitions:

Income Effect

A change in the quantity demanded of a product that results from the change in real income (purchasing power) caused by a change in the product’s price.

Wage Rate

The amount of compensation offered to an employee per unit of time (e.g., hourly, daily) or piece of work done.

Purely Competitive

Purely competitive markets are characterized by many buyers and sellers, homogeneous products, and the absence of barriers to entry or exit, leading to firms being price takers.

Imperfectly Competitive

Refers to market structures that do not meet the conditions of perfect competition, often characterized by a small number of sellers, product differentiation, or barriers to entry.