CFA Level I sample question

CFA Level I International Trade question

Economics / International Trade

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International Trade sample question

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Economics

International Trade

A small country faces a fixed world price of 10 per unit for an imported good. Under free trade, domestic consumption is 100 units and domestic production is 40 units. A tariff of 2 per unit raises the domestic price to 12, reducing consumption to 90 units and raising domestic production to 60 units. The total deadweight loss from the tariff is closest to:

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