Based on Scenario 6.1 above,if a tariff of 20 percent is placed on imports of dining room tables,and another tariff of 50 percent is placed on imports of wood and parts,then the effective rate of protection on tables made in the United States is
A)70 percent.
B)50 percent.
C)20 percent.
D)12.5 percent.

Question

Quizplus · Accepted Answer

The effective rate of protection considers both the tariff on the final product and the tariffs on the inputs. With a 20% tariff on tables and a 50% tariff on wood and parts, the effective protection rate is calculated to be 12.5%.