Suppose that United States furniture makers import $100 of wood and parts in order to make a dining room table selling for $500. The imports have no tariff of quota restrictions.
Based on Instruction 1 above, if a tariff of 20 percent is placed on imports of dining room tables, the effective rate of protection is
30 percent.
40 percent.
25 percent.
20 percent.
There is not enough information to tell.