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) What will happen to the Finnish price of steel if
Finnish demand increases and the tariff remains at €60perton?
A) It will not change.
B) It will increase.
C) It will decrease.
D) It will first increase, then decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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