Gce Model Questions Vol1 2017 Government Question 20
Practice objective / multiple choice question 20 from the 2017 Gce Model Questions Vol1 Government examination.
Country X imposes a 10\% tariff on imported cars. Before the tariff, the country imported 200,000 cars at an average price of $20,000 each, and domestic car producers sold 50,000 cars at $22,000 each. After the tariff is introduced, imports fall by 30\% and the price of each imported car rises by the tariff amount. Domestic producers increase output by 20\% while keeping their price unchanged. Calculate (a) the change in total automotive sector revenue (imports plus domestic sales) after the tariff, and (b) the total tariff revenue collected. Express the change in revenue as a decrease or increase in millions of dollars, and give tariff revenue in millions of dollars.
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About This Question
This is Gce Model Questions Vol1 2017 Government Question 20. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Government examination.
Difficulty level: Hard .
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