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- Subject
- Tariffseconomics-mcqs › tariffs
- Published
- 28 May 2019
- Last updated
- 28 May 2026
For a country that meets the assumptions of the small nation model, what is the impact of a 10% tariff on imported automobiles?
Multiple choice question for Tariffs. Select an option, then review the explanation below.
Explanation
According to the small nation model, imposing a 10% tariff on imported cars leads to a direct 10% increase in the domestic price of automobiles because the country is a price taker in the world market. Therefore, the price rises by the full amount of the tariff.
More Tariffs MCQs
Practice related questions from the same subject.
- 1.Under a free trade system, what is the total worth of imports?
- 2.What do empirical studies generally indicate about the nature of U.S. import tariffs?
- 3.Which of the following statements about government trade policies is NOT typically true?
- 4.If the nominal tariff on finished computers is 12% and the weighted average nominal tariff on the inputs for making computers is 18%, what can be said about the effective rate of protection for the computer sector?
- 5.If Pakistan applies a tariff on ballpoint pens consisting of 25 rupees per pen plus 12% of the pen's price, what type of tariff is this an example of?