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(Table: US

Question 9

Multiple Choice

(Table: U.S. Demand for and Supply of Widgets) The United States can import widgets from China at $4 each and from Mexico at $5 each. The United States imposes a tariff of $2 on each of its widget imports. Suppose that the United States and Mexico form a free-trade area. How much trade in widgets is diverted in the U.S.-Mexican free-trade area? (Table: U.S. Demand for and Supply of Widgets) The United States can import widgets from China at $4 each and from Mexico at $5 each. The United States imposes a tariff of $2 on each of its widget imports. Suppose that the United States and Mexico form a free-trade area. How much trade in widgets is diverted in the U.S.-Mexican free-trade area? A) 0 widgets B) 2 widgets C) 4 widgets D) 6 widgets


A) 0 widgets
B) 2 widgets
C) 4 widgets
D) 6 widgets

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