Q1 assume that the autarky charge of commodity x is 10 in

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Q1. Assume that the autarky charge of commodity X is $10 in Nation A, $8 in Nation B as well as $6 in Nation C, as well as Nation A is too small to affect costs in Nation B or C by trading. If Nation A initially imposes a nondiscriminatory ad valorem tariff of 100 percent on its imports of commodity X from Nations B as well as C, will Nation A produce commodity X domestically or import it from Nation B or Nation C?

Q2. What would be the necessary criteria needed to test a TSLS model regression? Are the assumptions the same as under a simple linear regression? What does TSLS imply about the data if a strong F is found?

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