1. Suppose that tablet computers sell in world markets for $2,500, and they are made with components worth $1,500. A small country produces both tablet computers and its components. The government of the country imposes a 20% tariff on imported tablet computers so that home tablet computer assembly firms can now charge up to $3,000 for a tablet computer. What is the effective rate of protection for the home tablet computer assembly firms? (4 marks)
2. Now suppose that to encourage domestic component production industry, government imposes a 50% tariff on imported components.

11 marks question