Assume the United States is a large consumer of steel that is able to influence the world price. Its demand and supply schedules are respectively denoted by DU.S. and SU.S. in Figure 4.2. The overall (United States plus world) supply schedule of steel is denoted by SU.S.+W.
Figure 4.2. Import Tariff Levied by a "Large" Country ?
-Consider Figure 4.2.Of the $100 tariff, ____ is passed on to the U.S.consumer via a higher price, while ____ is borne by the foreign exporter.
A) $25, $75
B) $25, $75.
C) $75, $25.
D) $75, $25

Question

Assume the United States is a large consumer of steel that is able to influence the world price. Its demand and supply schedules are respectively denoted by DU.S. and SU.S. in Figure 4.2. The overall (United States plus world) supply schedule of steel is denoted by SU.S.+W.
Figure 4.2. Import Tariff Levied by a "Large" Country  ?
-Consider Figure 4.2.Of the $100 tariff, ____ is passed on to the U.S.consumer via a higher price, while ____ is borne by the foreign exporter.
A) $25, $75 
B) $25, $75. 
C) $75, $25. 
D) $75, $25

Quizplus · Accepted Answer

The correct answer is $75 is passed on to the U.S. consumer via a higher price, while $25 is borne by the foreign exporter.

Assume the United States Is a Large Consumer of Steel