Given the Following Information for Industry X in Country A

question 13

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 unit of X, and that country A is a "small" country:
$\begin{array}{lcc}&\text { free trade price }&\text {nominal tariff rate }\\\text { final product X } & \$200 & 25 \% \\\text { input Y (only input to X) } & \$ 100 & 15 \%\end{array}$

The effective rate of protection (ERP) for industry X is __________ percent. However, if The nominal tariff rate on input Y is eliminated (i.e., the 15% rate become 0%) , the ERP For industry X would become __________ percent.

• A) 20; 25
• B) 35; 50
• C) 40; 50
• D) 35; 25

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