Suppose Kenya imports film at a border price of $5 per roll.If there are 70 Kenyan shillings to the dollar and Kenya imposes a 50 percent tariff on imported film,then the domestic price of the imported film per roll is:

Question

Quizplus · Accepted Answer

The border price of imported film is $5 per roll, or 350 Kenyan shillings (70 shillings/dollar x $5/dollar). With a 50% tariff, the total cost of importing film rises by 50%, or by 175 Kenyan shillings per roll (50% x 350 shillings per roll). Therefore, the domestic price of imported film per roll is 525 shillings (350 shillings + 175 shillings).Therefore, the correct answer is C.

Suppose Kenya Imports Film at a Border Price of $5