Gce Model Questions Vol1 2018 Government Question 12
Practice objective / multiple choice question 12 from the 2018 Gce Model Questions Vol1 Government examination.
Country A imposes an import tariff on steel of \(15\%\) of the world price. After a year, the tariff is reduced by \(40\%\) of its original rate, and simultaneously a subsidy of \(5\%\) of the world price is granted to domestic steel producers. If the world price of steel is \(\$500\) per tonne, and domestic producers previously sold at \(\$480\) per tonne (before the subsidy), determine (a) the new effective price of imported steel after the tariff reduction, and (b) the percentage price advantage of domestic steel over the imported steel after these changes.
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About This Question
This is Gce Model Questions Vol1 2018 Government Question 12. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Government examination.
Difficulty level: Hard .
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