题目内容
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.
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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.
A "large" country, that levies a tariff on imports, cannot improve the terms at which it trades with other countries.
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