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For 3b-3d, because there are no tariffs on import components, how would I solve for the ERP for vodka, starting with 3b? 3 NRP &
For 3b-3d, because there are no tariffs on import components, how would I solve for the ERP for vodka, starting with 3b?
3 NRP & ERP (6 points) The world price of a liter of vodka is $7.00. While the distillation is done domestically, some of the grains and materials for the bottle are imported. The value of imported components is $2.00. Assume that there is no tariff on imported components used to make vodka. a) (1 points) What is the NRP for vodka if there is a tariff of $3.00? b) (1 points) What is the ERP for vodka if there is a tariff of $3.00? c) (2 points) Now assume that there is a tariff of $1.50 on the inputs used to make vodka. What would you expect to be larger, the NRP or the ERP? Why? d) (2 points) Calculate the new NRP and new ERPStep by Step Solution
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