Note: Good A B C D E F G H I J Nominal rate 10% 5% 0% 30% 2% 2.5% 15% R0.50/unit 40% R2.50/unit Value R400 R600 R500 R300 R200 R400 R100 R400 (100 units) R200 R100 (10 units) * Specific tariff value for total units in parentheses, i.e. the total tariff revenue generated from importing the total number of units in parentheses. Transforming a specific tariff into an ad valorem tariff. (specific tariff/ value of an imported unit of the good)*100 => example: good H=> a total value of R400 is imported of good H. In total, 100 units were imported, which implies that each unit is valued at R400/ 100 = R4. The specific tariff is R0.50/unit. Therefore, the ad valorem tariff of good H is (R0.5/R4)*100 = 12,5% (a) Calculate the unweighted-average nominal tariff rate for Tarheelia. (b) Calculate the weighted-average nominal tariff rate for Tarheelia.

Note: Good A B C D E F G H I J Nominal rate 10% 5% 0% 30% 2% 2.5% 15% R0.50/unit 40% R2.50/unit Value R400 R600 R500 R300 R200 R400 R100 R400 (100 units) R200 R100 (10 units) * Specific tariff value for total units in parentheses, i.e. the total tariff revenue generated from importing the total number of units in parentheses. Transforming a specific tariff into an ad valorem tariff. (specific tariff/ value of an imported unit of the good)100 => example: good H=> a total value of R400 is imported of good H. In total, 100 units were imported, which implies that each unit is valued at R400/ 100 = R4. The specific tariff is R0.50/unit. Therefore, the ad valorem tariff of good H is (R0.5/R4)100 = 12,5% (a) Calculate the unweighted-average nominal tariff rate for Tarheelia. (b) Calculate the weighted-average nominal tariff rate for Tarheelia.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 4CQQ

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