Suppose that Australia imports coffee from Colombia and that the free market pri

Question

Suppose that Australia imports coffee from Colombia and that the free market price is $8.00 per pound. Before the Uruguay Round took place between 1986 and 1993, Australia imposed a 20.1% tariff on imports. Thus, Australians paid the price of per pound. One of the accomplishments of the Uruguay Round was significant across-the-board tariff cuts for industrial countries, as well as many developing countries. Assume that Australia reduced its tariffs to 12.2%. Holding the price of coffee constant at $8.00 per pound, you can calculate that consumers paid per pound. Based on the calculations and the scenarios presented, the most likely effects of the Uruguay Round on trade between Colombia and Australia are that consumers in Australia and producers in Colombia ______________.

Explanation / Answer

1)thus australians payed =price after tarrifs =120.1% of 8 =9.61$ per pound 2)consumer payed 112.2% of 8 = 8.9$ per pound 3)most likely effect of uruguay .. consumer in australia LOST and producers in columbia NEITHER GAINED NOR LOST

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