The U.S. International Trade Commission’s committee in charge of the global safe
ID: 1167119 • Letter: T
Question
The U.S. International Trade Commission’s committee in charge of the global safeguard investigation involving imports of steel has announced its recommendations to be forwarded to the president. Of the 33 steel product categories investigated, 12 have experienced a significant increase in the quantity of imported steel, causing serious injury or the threat of serious injury to the U.S. steel industry. The commission has recommended that the president impose a 20 percent tariff on these 12 categories of imported steel.
If the president follows the commission’s recommendations, what will happen to the supply of foreign steel in these categories?
It will decrease.
It will increase.
It will not change.
What impact will this have on the equilibrium quantity of steel sold (in these categories) in the United States?
It will decrease.
It will not change.
It will increase.
Will the equilibrium price for these categories of steel in the United States market increase or decrease?
It will increase.
It will decrease.
It will not change.
Explanation / Answer
a) After an imposition of a tariff on the imported steel the quantity of steel coming into the nation will decrease.
b) The equilibrium quantity of steel will decrease as the imports are low and the local producers can not fulfill the whole demand on their own.
c) The equilibrium price will increase. Local producers are inefficient and they were not able to compete with imported steel at a low price.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.