Multiple Choice
SCENARIO: FINNISH STEEL
Suppose that the freetrade price of a ton of steel is €500.(Note: € is the
Symbol for the euro, a common currency used in 16 European countries,
Including Finland.) Finland, a small country, imposes a €60 perton
Specific tariff on imported steel.With the tariff, Finland produces 300,000
Tons of steel and consumes 600,000 tons of steel.
Reference: Ref 85
(Scenario: Finnish Steel) Suppose that the €60perton tariff caused
Finnish production of steel to increase by 100,000 tons and Finnish
Consumption of steel to fall by 100,000 tons.What is the value of
Finland's welfare loss due to the tariff?
A) 200,000 tons
B) €6 million
C) €12 million
D) €15 million
Correct Answer:
Verified
Correct Answer:
Verified
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