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

question 14

Multiple Choice

Denmark is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Denmark imposes a $5 tariff on chips.Which of the following outcomes is possible?

• A)The price of chips in Denmark increases to $19; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark decreases.
• B)The price of chips in Denmark increases to $17; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark decreases.
• C)The price of chips in Denmark increases to $17; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark increases.
• D)The price of chips in Denmark increases to $15; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark decreases.

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Definitions:

Allied Debts

The financial obligations incurred by countries allied during wartime, particularly during World War I, owed to other nations and financial institutions.

American Response

The actions or reactions of the United States government, its people, or organizations to domestic or international events, crises, or policies.

Official Relief Programs

Government-sponsored initiatives designed to provide financial assistance and support to individuals and communities in need.

Kellogg-Briand Pact

An international agreement signed in 1928, in which signatory states pledged to renounce war as a means of national policy and settle disputes by peaceful means.