Problem
1. Although tariffs may improve the welfare of a single nation, the world's welfare may decline. Under what conditions would this be true?
2. What impact does the imposition of a tariff normally have on a nation's terms of trade and volume of trade?
3. Suppose that the production of $1 million worth of steel in Canada requires $100,000 worth of taconite. Canada's nominal tariff rates for importing these goods are 20 percent for steel and 10 percent for taconite. Given this information, calculate the effective rate of protection for Canada's steel industry.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.