The table below shows the prices in Canada of one kilogram of cheddar cheese produced in three different countries.Assume that all cheddar cheese is identical. TABLE 33-1 Refer to Table 33-1.Suppose Canada and the United Kingdom negotiate a free-trade agreement in cheese.But Canada has a 40% tariff on cheese imported from other countries.From which country will Canada now buy its cheese?

Question

The table below shows the prices in Canada of one kilogram of cheddar cheese produced in three different countries.Assume that all cheddar cheese is identical.  TABLE 33-1 Refer to Table 33-1.Suppose Canada and the United Kingdom negotiate a free-trade agreement in cheese.But Canada has a 40% tariff on cheese imported from other countries.From which country will Canada now buy its cheese?

Quizplus · Accepted Answer

With the free-trade agreement in cheese between Canada and the United Kingdom, Canada would now be able to import cheese from the United Kingdom without any additional tariffs. Since the price of cheese in the United Kingdom is lower than the prices in the other two countries, it would make sense for Canada to buy all of its cheese from the United Kingdom.

The Table Below Shows the Prices in Canada of One