Question

Consider a hypothetical market for salt in Canada. If the world price of salt is $40 per ton and Canada allows free trade, Blank______ tons of salt would be imported to Canada. Suppose the Canadian government imposes a tariff of $20 per ton on salt. The new price would be equal to Blank______.

Answer 1

Based on the world price of $40, if Canada engaged in free trade, the tons of salt imported would be 1,200 tons.

If a tariff of $20 per ton was imposed, the new price would be $60.

How much salt would Canada import?

Canada would import:

= Domestic demand at $40 - Domestic supply at $40

= 1,800 - 600

= 1,200 tons

If the government imposed $20 tariffs on salt, the price would go to:

= Price of salt + tariff

= 40 + 20

= $60

Find out more on tariffs at https://brainly.com/question/1172085.

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