Given the Following Information for Industry X in Country A

question 18

Multiple Choice

Given the following information for industry X in country A, and assuming that input Y Is imported, that one unit of Y is required for each one unit of X, and that country A is a "small" country:
$\begin{array}{lcc}&\text { free trade price }&\text {nominal tariff rate }\\\text { final product X } & \$ 120 & 10 \% \\\text { input Y (only input to X) } & \$ 80 & 15 \%\end{array}$

The "effective tariff rate" or "Effective Rate of Protection (ERP) " for industry X in Country A is __________ percent.

• A) 0
• B) 10
• C) 12.5
• D) 25

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Definitions:

Linear Equations

Equations of the first degree, meaning they involve only linear terms and constant terms.

Inconsistent

Inconsistent describes a system of equations that has no solution, meaning there is no set of values that satisfy all equations simultaneously.

Value Of K

A specific quantity or variable that needs to be identified or solved for in an equation or mathematical problem.

Y-Intercept

The y-intercept is the point where a graph intersects the y-axis, typically represented as the value of y when x equals 0.