Chile Is an Importer of Computer Chips,taking the World Price

question 206

Multiple Choice

Chile is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Chile imposes a $7 tariff on chips.Which of the following outcomes is possible?

• A)The price of chips in Chile increases to $19;the quantity of Chilean-produced chips decreases;and the quantity of chips imported by Chile decreases.
• B)The price of chips in Chile increases to $16;the quantity of Chilean-produced chips increases;and the quantity of chips imported by Chile decreases.
• C)The price of chips in Chile increases to $19;the quantity of Chilean-produced chips increases;and the quantity of chips imported by Chile decreases.
• D)The price of chips in Chile increases to $16;the quantity of Chilean-produced chips increases;and the quantity of chips imported by Chile does not change.

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Definitions:

Earnings Announcement Date

The specific date on which a company publicly releases its financial performance for a specific period, usually quarterly or annually.

Financial Reports

Formal records of the financial activities and position of a business, person, or other entity, presented in a structured manner.

Stock Prices

The current price at which a share of stock can be bought or sold in the market.

Future Earnings

The projected income a company is expected to earn in future periods, often used by investors to evaluate the firm's growth potential and value.