The United States applies a 25% tariff on imported pickup trucks. If the United States is considered to be a large country, then the U.S. price of an imported Toyota pickup with a CIF price (price landed at the U.S. border prior to the imposition of the tariff) of $20,000 will be:

Question

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As a large country, the United States can affect world prices by its trade policies. Therefore, the price of an imported Toyota pickup with a CIF price of $20,000 will be between $20,000 (the CIF price) and $25,000 (the CIF price plus the 25% tariff). So the answer is D, between $20,000 and $25,000.

The United States Applies a 25% Tariff on Imported Pickup