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 likely to happen to Finnish production of steel and the price of steel sold in Finland after the €60-per-ton tariff is imposed?
A) Finnish steel production will fall, and the Finnish price of steel will fall.
B) Finnish steel production will rise, and the Finnish price of steel will fall.
C) Finnish steel production will fall, and the Finnish price of steel will rise.
D) Finnish steel production will rise, and the Finnish price of steel will rise.
Correct Answer:
Verified
Correct Answer:
Verified
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