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?

Now suppose that to encourage domestic component production industry, government imposes a 50% tariff on imported components.

i. What is the nominal and the effective rate of protection for the domestic component production industry?

ii. Calculate the effective rate of protection for the home tablet computer assembly firms.