Free Trade/ Protectionism
Which of the following is NOT a type of PROTECTIONISM?
Tariffs
Quotas
Subsidies
Trading Blocs
Trading Blocs
What do consumers want?
Free trade
World Price
Free healthcare
World price
The curve that shifts in which direction?
What is the world supply curve shifts upwards to a higher world price?
Why does the government provide subsidies?
So producers can produce more at a lower price/ protectionism
What is red tape
a method to limit or prohibit imported goods
examples: complex paperwork, legal fees, border delays, etc.
Which is an argument FOR protectionism?
Encouraging over specialization
Protecting a sunrise industry
Increasing import prices
Encouraging dumping
Protecting a sunrise industry
Foreign producers export?
Q1 to QE
QE to Q2
Q1 to Q2
Q1 to Q2
Where domestic producers produce
What is domestic equilibrium quantity or Q3?
Where consumers pay
World price equilibrium
How are hidden trade barriers, barriers to trade
they provide domestic firms with a competitive advantage
What is dumping?
selling a product to a country for a very low price
Foreign producers export
the distance between Q1 and Q2
Cost of a tariff for the producer
What is domestic revenue increase from g to g+a+b+c+h?
Revenue for domestic producers vs foreign producers
Producer revenue rises (0Q3)
Foreign producer revenue falls (Q3 to Q2)
health and safety standards ensure
unhealthy and unsafe products are not being imported
What is one argument against trade barriers, regarding competitive advantage?
There is a lack of specialization and lack of inefficiency
Pw greater than Pe
Producers will sell at Pw and export the remaining quantity
Domestic revenue
g+a+b+c+h
Where does the government provide a subsidy (what letters)
e+f+g
Name a type of hidden trade barrier
Which of the following is true?
Protectionism is used to prevent dumping
Protectionism causes high economic growth
Protectionism causes the prices of imports to decrease
Protectionism is used to prevent dumping
With foreign trade consumers import what
Goods at a lower Pw
Why is there deadweight loss for producers?
Lost producer efficiency
With a quota, domestic revenue increases from a to what?
a+c+d+f+i+j
environmental standard restrictions
concerns with pollution, nonrenewable resources, deforestation, dumping, reducing climate change