Multiple Choice
Suppose that the free-trade price of a ton of steel is €500. (Note: € is the symbol for the euro, a common currency used in 19 European countries, including Finland.) Finland, a small country, imposes a €60 per-ton specific tariff on imported steel. With the tariff, Finland produces 300,000 tons of steel and consumes 600,000 tons of steel. What is the purpose of this €60-per-ton tariff?
A) Its purpose is to protect Finnish steel consumers from foreign competition.
B) Its purpose is to protect Finnish steel producers and consumers from the World Trade Organization.
C) Its purpose is to protect Finnish steel producers from foreign competition.
D) Its purpose is to cause Finland to comply with provisions of the General Agreement on Tariffs and Trade.
Correct Answer:
Verified
Correct Answer:
Verified
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