Incentives for Smuggling. If a country bans imports, smugglers may try to penetrate its markets. Suppose Chipland bans shirt imports, causing some importers to bribe customs officials who “look the...

Incentives for Smuggling. If a country bans imports, smugglers may try to penetrate its markets. Suppose Chipland bans shirt imports, causing some importers to bribe customs officials who “look the other way” as smugglers bring shirts into the country. Your job is to combat shirt smuggling. Use the information in Figure 18.3 on page 396 to answer the following questions:

a. Suppose importers can sell their shirts on the world market at a price of $12 per shirt. How much is an importer willing to pay to get customs officials to look the other way?

b. What sort of change in trade policy would make your job easier