Question 1 (18 points): Suppose that the autarky price of commodity X is $18 in Nation A, $15 in Nation B, and $1 1 in Nation C, and Nation A is too small to affect prices in Nation B or C by trading. 1.1 (3 points) If nation A initially imposes a nondiscriminatory ad valorem tariff of 100 percent ncrease on its imports of commodity X from all nations, Nation A will (circle the right answer): a produce commodity X domestically b. import from Nation B c. import from Nation C 1.2 (3 points) If nation A subsequently forms a custom union with Nation B, Nation A will: a. produce commodity X domestically fictions a b.import from Nation B c. import from Nation C 1.3 (3 points) Is this customs union trade creating or trade diverting? Why? Nation A form) a customs union with Nation By this would be trade, creating union. since it replace, domestic production of commodity X at Px= 18 with tariff est-cost free import of commodity x from nation B at Px= $15. cipating 1.4 (3 points) Suppose Nation A imposes a nondiscriminatory ad valorem tariff of 50 percent on imports of commodity X from Nations B and C, Nation A will: a. produce commodity X domestically Nation B 27.5 b. import from Nation B Nation ( 16. 5 import from Nation C opean 1.5 (3 points) If Nation A subsequently forms a customs union with Nation B, Nation A will: a. produce commodity X domestically b. import from Nation B c. import from Nation C ort ley 1.6 (3 points) Is this customs union trade creating or trade diverting? Why? when nation A forms a customs union with Nation B this action will be trade diverting customsunion because Nation A replaces lower Price imports of $ 16. 5 from nation ( with a higher priced een imports of commodity X from Nation Bat $15