
Country M imposes a tariff on imports of steel.
Which price elasticity values will result in the smallest reduction in steel imports into M?
Select ONE answer:
- price elasticity of supply of domestic steel producers in country M – 0.2 & price elasticity of demand for steel in country M – 0.4
- price elasticity of supply of domestic steel producers in country M – 1.0 & price elasticity of demand for steel in country M – 0.8
- price elasticity of supply of domestic steel producers in country M – 1.5 & price elasticity of demand for steel in country M – 1.0
- price elasticity of supply of domestic steel producers in country M – 2.0 & price elasticity of demand for steel in country M – 1.2
Show your workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Economics KS4 and KS5 classes.
The answer is 1
- Correct
- Not correct
- Not correct
- Not correct
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