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.

1. a)(1 points) What is the NRP for vodka if there is a tariff of $3.00?
2. b)(1 points) What is the ERP for vodka if there is a tariff of $3.00?
3. 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?
4. d)(2 points) Calculate the new NRP and new ERP.