Economics 0455 · IGCSE · Globalisation, free trade and protection

Globalisation, free trade and protection — practice question

The US imposes a 25% tariff on Chinese steel to safeguard jobs in the US steel industry. In which circumstance would this policy be most effective?

  • AThe price elasticity of demand for Chinese steel is $-2.5$.
  • BThe price elasticity of demand for Chinese steel is $-0.5$.
  • CThe price elasticity of supply for Chinese steel is $2.5$.
  • DThe price elasticity of supply for Chinese steel is zero.

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