Refer to the information provided in Figure 18.4 below to answer the questions that follow. Figure 18.4
-Refer to Figure 18.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If there is free trade, this country will ________ 200 leather wallets.

Question

Refer to the information provided in Figure 18.4 below to answer the questions that follow.  Figure 18.4
-Refer to Figure 18.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If there is free trade, this country will ________ 200 leather wallets.

Quizplus · Accepted Answer

With a domestic price of $20, the country cannot compete with the international market and must import leather wallets at a lower price of $10. With free trade, the country will import 200 wallets at $10 each. With a tariff, the international price increases to $15 and the country will still import 200 wallets but at the higher price. Therefore, the best option is to import wallets.

Refer to the Information Provided in Figure 18