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Reading 16: Trading with the World - LOS b ~ Q6-7

Q6. Suppose the world price of Mercury tennis shoes is $60, but they sell in the U.S. for $75 due to a $15 import tariff. Who will most likely be negatively affected by the tariff?

A)   U.S. Consumers.

B)   Producers.

C)   Foreign Consumers.

Q7. Prior to the beginning of summer, the government of Japan places a 150 percent tariff on imported chain saws. Assume for this example that this tariff has a significant impact on the supply of chain saws. The government’s action:

A)   will protect the jobs and high wages of Japanese chain saw industry workers.

B)   benefits the Japanese government and domestic producers.

C)   is more harmful than if the government had limited the amount of chain saws imported.

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