If the world price is $40, a specific tariff of $10 is equivalent to an ad valorem tariff of
A) $10.
B) $20.
C) 20 percent.
D) 25 percent.

Name: If the world price is $40, a specific tariff of $10 is equivalent to an ad valorem tariff of A) $10. B) $20. C) 20 percent. D) 25 percent.
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Question

Quizplus · Accepted Answer

An ad valorem tariff is calculated as a percentage of the value of the imported goods. In this case, a $10 tariff on a good priced at $40 represents a 25% tariff ($10/$40 = 0.25 or 25%).

If the World Price Is $40, a Specific Tariff of $10