Order the answer to: Suppose that upon Poland’s entering the European Union, it is

Assignment Help business economics Order the answer to: Suppose that upon Poland’s entering the European Union, it is

business economics

Order the answer to: Suppose that upon Poland’s entering the European Union, it is

Question Suppose that upon Poland’s entering the European Union, it is discovered that the cost of automobile production in Poland is €20,000 while it is €30,000 in Germany. Suppose that the EU, which has a customs union, has an X percent tariff on automobiles and that the costs of production are equal to Y (valued in euros) in Japan. Comment on whether the addition of Poland to the European Union would result in trade creation or trade diversion under the following scenarios: a. X = 50% and Y = €18,000 b. X = 100% and Y = €18,000 c. X = 100% and Y = €12,000
Subject business economics
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