Answer the following statements true (T) or false (F)

Question

1.An import tariff will worsen the terms of trade for a "small" country but improve the terms of trade for a "large" country.
2.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.
3.True
4.Assume that the United States imports laptops from South Korea at a price of $200 per unit and that these laptops are subject to an import tariff of 20 percent. Also assume that U.S. components are used in the laptops assembled by South Korea and that these components have a value of $100. Under the Offshore Assembly Provision of U.S. tariff policy, the price of an imported laptop to the U.S. consumer after the tariff has been levied is $220.
5.Assume that the United States imports televisions from Taiwan at a price of $300 per unit and that these televisions are subject to an import tariff of 25 percent. Also assume that U.S. components are used in the televisions assembled by Taiwan and that these components have a value of $100. Under the Offshore Assembly Provision of U.S. tariff policy, the price of an imported television to the U.S. consumer after the tariff has been levied is $375

Answer 1

1.False
2.True
3.False
4.True
5.False