Final answer:
Without the specific tariff amount for vehicles, we cannot determine the correct new price of an imported vehicle after a tariff from the given options. Understanding the impact of tariffs is important as they increase the price consumers pay and can have broader economic implications, including job losses in certain sectors.The correct answer is option B
Step-by-step explanation:
The subject in question relates to understanding the impact of tariffs on the price of imported goods, as well as the broader economic implications of such trade policies. It specifically assesses the consequences of a tariff on the price of an imported vehicle.
To answer the student's question, we examine the Offshore Assembly Provision of U.S. tariff policy. According to the provided Table 3.4, which shows price and demand shifts for a car example, we can determine the new price of an imported vehicle after a tariff has been levied.
Following the information in Table 3.4, we see that without the tariff, the price of a car could be $20,000, $22,000, or other prices given varying demand. Introducing a $10 tariff (as an example from the text, but not the actual tariff amount) would increase the cost of production and would ultimately be added to the price of the final product sold to the consumers.
This means consumers would pay the price plus the tariff. Assuming the car costs $20,000 initially, and a tariff based on the example from Figure 3.7 is $10, then the new price could potentially be $20,010 (not one of the options provided in the multiple-choice question).
However, since the student's question does not provide the specific tariff amount for the vehicle but asks us to choose from stated prices, further information would be required to determine the correct price post-tariff from the given options. Without the specific tariff information for vehicles, we cannot accurately answer what the exact new price would be.The correct answer is option B
The economic implications of tariffs are substantial. They can lead to an increase in the price of imported goods, which can reduce consumer spending in other areas. This can affect job markets as seen with the tariff policy on Chinese tires that saved jobs in the U.S. tire manufacturing, but led to a loss in other sectors, ultimately resulting in a net job loss and an expensive cost to save each job in the tire sector.