b. The price of autos within the nation will rise by less than 10 percent:

This option suggests that the price increase for autos within the nation might be lower than the 10 percent tariff imposed on imports. However, tariffs are typically passed on to consumers in the form of higher prices.

When a tariff is imposed on imported goods, such as autos in this case, the additional cost incurred by importers is often transferred to consumers through increased prices. The tariff directly adds 10 percent to the cost of importing autos, and this cost is usually passed on to consumers.

Hence, the price increase for autos within the nation matches the tariff rate of 10 percent rather than being lower.

c. The price of autos within the nation will rise by more than 10 percent:

This option implies that the price increase for autos within the nation might exceed the 10 percent tariff imposed on imports. However, tariffs are specific percentages applied to the import price to generate revenue or protect domestic industries.

The 10 percent tariff, in this case, directly adds to the cost of importing autos. It does not inherently cause the price to rise by an amount greater than the imposed tariff rate. Therefore, the price increase will be equivalent to the 10 percent tariff and not surpass it.

d. The price of autos will not rise because of internal competition:

This option suggests that internal competition within the nation would somehow prevent the price of autos from increasing despite the imposition of a 10 percent tariff on imports. However, while internal competition might influence pricing dynamics to some extent, tariffs directly impact the cost of imported goods.

Tariffs act as an additional cost levied on imports, causing the cost of autos brought into the nation to rise. Even with internal competition, businesses importing autos would need to cover the increased cost due to tariffs, likely leading to a price increase for consumers, albeit potentially mitigated by competition but not entirely nullified.

In summary, the imposition of a 10 percent tariff on imported autos in a small nation will generally lead to a corresponding 10 percent increase in the price of autos within the nation due to the direct impact of the tariff on import costs, despite internal competitive factors influencing market dynamics.