Australia Is an Importer of Computer Chips and Is Also

question 155

Multiple Choice

Australia is an importer of computer chips and is also a price taker in the chip market.The world price of these computer chips is $25.If Australia imposes a $5 tariff on chips,who will gain

• A)Consumers and producers will both gain.
• B)Consumers and producers will both lose.
• C)Consumers will gain, and producers will lose.
• D)Consumers will lose, and producers will gain.

---

Definitions:

Cancellation Option

A contract clause that allows a party to terminate the agreement under certain conditions before its natural end.

Lease Payment

Periodic payments made by a lessee to a lessor for the use of an asset.

Net Advantage to Leasing

A financial concept that compares leasing to purchasing, calculating the costs saved or incurred over the lease term.

Equipment Cost

The total expenditure incurred to purchase, install, and make operational a piece of equipment.