If a commodity X is subject to an import duty of 25% ad valorem, the nominal tariff is _________.Select one:a.0.5b.0.25c.0.125d.0.025

Break Down the Problem

1. We need to determine the nominal tariff based on the given import duty of 25% ad valorem.
2. Understand the meaning of "ad valorem" and how it relates to nominal tariffs.

Relevant Concepts

1. Ad Valorem Duty: This is a percentage of the value of the commodity, meaning that the duty is calculated based on the assessed value of the imported goods.
2. Nominal Tariff: Typically represents the tariff rate expressed as a decimal fraction.

Analysis and Detail

1. The import duty of 25% can be expressed as a decimal fraction. Thus, we have: $\text{Nominal Tariff} = \frac{25}{100} = 0.25$

Verify and Summarize

1. Review the conversion of percentage to decimal. The duty stated as 25% correctly converts to 0.25.
2. Since we have accurately derived the nominal tariff using the correct percentage conversion, we can conclude that the answer is verified.

Final Answer

The nominal tariff is 0.25 (option b).