Information for questions 8-10 A country assembles laptops m…
Information for questions 8-10 A country assembles laptops made up of parts imported from the rest of the world. This country imposes a tariff of 10% on imported laptops (that is, laptops already assembled). It also imposes a tariff of 20% on imported parts that are used to assemble laptops. The following table shows what the price of one assembled laptop, and of the parts needed for one laptop, would be under free trade. You can use the blank rows and column as an aide: as you solve these questions you may want to reproduce the table in your scratch paper, and fill in the blank cells as you go. For all questions, enter a whole or decimal number, as appropriate. For added values, enter the dollar amount (no $ sign). For the effective rate of protection enter a percentage (no % sign), not the corresponding decimal number. Make sure to enter the negative sign if the effective rate of protection is negative. For example, if the effective rate of protection is 15.6%, enter 15.6, not 0.156, and if it is -24.1%, enter -24.1, not -0.241, or 0.241, or 24.1. Enter 0 if the answer cannot be obtained with the information given. Only exact answer is accepted, so double and triple check your calculations. Free trade (no tariff) 10% tariff on one laptop 20% tariff on parts Price of one (assembled) laptop 1500 Price of parts for one laptop 1000 Value added Effective rate of protection Calculate the value added of the assembling firms in this country, per laptop, if the country were in free trade.
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