When the production of a commodity does not utilize imported inputs,the effective tariff rate on the commodity:
A) Exceeds the nominal tariff rate on the commodity
B) Equals the nominal tariff rate on the commodity
C) Is less than the nominal tariff rate on the commodity
D) None of the above

Question

Quizplus · Accepted Answer

When a commodity is produced without using any imported inputs, the effective tariff rate on the commodity equals the nominal tariff rate, as there are no additional costs added to the production process due to the tariff. This assumes that there are no other factors, such as subsidies, that can affect the production process.

When the Production of a Commodity Does Not Utilize Imported