(Figure: U.S.Imports from Mexico and Asia) With the $100 tariff,
The United States will import ______ from Mexico and _______
From China.
A)400; 100
B)250; 250
C)250; 500
D)400; 200

Question

(Figure: U.S.Imports from Mexico and Asia) With the $100 tariff,
The United States will import ______ from Mexico and _______
From China.
A)400; 100 
B)250; 250 
C)250; 500 
D)400; 200

Quizplus · Accepted Answer

With a $100 tariff, the new prices for Mexican and Asian goods are $300 and $500 respectively. The United States will import 250 units from each country since the world price is $200 and both countries have the same tariff-inclusive price ($300 for Mexico and $500 for Asia). Thus, the answer is (B) 250 from Mexico and 250 from China.