1.) Suppose that the production of $1 million worth of steel in Canada requires $100,000 worth of taconite. Canada's normal tarrif rates for importing these goods are 20% for steel and 10% for taconite. Given this information, calculate the effective rate of production for Canada's steel industry.
2.) What is meant by the terms bonded warehouse and foreign trade zone? How does each of these help importers mitigate the effects of domestic import duties?