Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price.
Figure 4.1. Import Tariff Levied by a "Small" Country
-Consider Figure 4.1.The tariff would be prohibitive (i.e., eliminate imports) if it equaled
A) $2.
B) $3.
C) $4.
D) $5.

Question

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price.
Figure 4.1. Import Tariff Levied by a "Small" Country 
-Consider Figure 4.1.The tariff would be prohibitive (i.e., eliminate imports) if it equaled
A) $2. 
B) $3. 
C) $4. 
D) $5.

Quizplus · Accepted Answer

A prohibitive tariff is one that is high enough to eliminate imports entirely. If the tariff is $5, it is likely high enough to prevent any imports from being economically viable, thus eliminating them.

Figure 41 Illustrates the Demand and Supply Schedules for Pocket Calculators