Figure 17-12 -In Figure 17-12, with a Tariff of $0.50 Per Unit

question 151

Multiple Choice

Figure 17-12
-In Figure 17-12, with a tariff of $0.50 per unit and a world price of $1.00,

• A) 25 units will be exported
• B) 25 units will be imported
• C) 50 units will be exported
• D) 50 units will be imported
• E) 10 units will be exported

---

Definitions:

Present Value

The discounted value of a future cash flow, taking into account a specific rate of interest.

Market Rate

The current price or rate at which a good or service can be bought or sold in a given market.

Compound Interest

Interest on a loan or deposit calculated based on both the initial principal and the accrued interest from previous periods.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a pre-specified price.