2. Mexico uses the equivalent of $200 of imported parts and the equivalent of $100 of imported wood to produce a television whose world price is $600.

a. What is the added value of the television industry in Mexico?

b. Suppose that Mexico imposes an ad valorem tariff of 20% on imports of televisions. How is the added value of the Mexican television industry affected? What is the effective protection rate provided to Mexican television products?

c. Suppose that in addition to the tariff on TV imports, Mexico imposes tariffs of 8 and 14% on imports of parts and wood, respectively. Calculate the new effective protection rate.

d. Recalculate the effective rate of protection, assuming that the nominal duty rates on parts and lumber are 50 and 35%, respectively.