1)What is the nominal tariff and the effective rate of protection if there is a 20% tariff on a file cabinet and a 30% tariff on the imported steel? The file cabinet costs $200, half of the price is due to manufacturing costs and half to imported steel.

2) Provide a comparison of production subsidy, a tariff, and a quota using a graph of each in your explanation 3.

3A) Explain a Customs Union. )

4B) Why does creating a Customs Union create trade and benefit a country? Use a graph in your explanation.

5C) Now assume that a small country (A) forms a Customs Union with another country (C), however that country is not the low cost producer, which is a third country (B). Use a graph in your explanation of the “trade diversion” and “trade creation” due to the formation of this Customs Union between A and C.