题目内容
The deadweight losses of an import tariff consist of the protection effect plus the consumption effect.
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Suppose that the tariff on imported steel is 40 percent, the tariff on imported iron ore is 20 percent, and 30 percent of the cost of producing a ton of steel consists of the iron ore it contains. The effective rate of protection of steel is approximately 49 percent.
The redistribution effect is the transfer of producer surplus to domestic consumers of the import-competing product.
As long as it is assumed that a nation accounts for a negligible portion of international trade, its levying an import tariff necessarily increases its overall welfare.
Changes in a "large'' country's economic conditions or trade polices can affect the terms at which it trades with other countries.
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