Multiple Choice
Denmark is an importer of computer chips,taking the world price of $12 per chip as given.Suppose Denmark imposes a $5 tariff on chips.Which of the following outcomes is possible?
A) The price of chips in Denmark increases to $19; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark decreases.
B) The price of chips in Denmark increases to $17; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark decreases.
C) The price of chips in Denmark increases to $17; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark increases.
D) The price of chips in Denmark increases to $15; the quantity of Danish-produced chips increases; and the quantity of chips imported by Denmark decreases.
Correct Answer:
Verified
Correct Answer:
Verified
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