Cal state Fullerton

ECON 335

Calculating the effective rate of protection

TeleGlobal is an American firm producing TV sets. TeleGlobal imports TV set components from Pakistan and assembles them domestically. Suppose that in the United States, a TV set sells for $400 and that 80% of the TV set's value comes from the value of the imported components. The United States imposes a 40% tariff on TV sets and a 10% tariff on the TV set's components. Assume that costs of producing components are the same in the United States and Pakistan and that transit costs are nonexistent.

Based on the information provided, the effective rate of protection that TeleGlobal receives from the tariff is.???---------

Please ensure to provide me with the correct answer and all the explanations and stpes showing how you got the provided answer. Thank you