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15 Cards in this Set
- Front
- Back
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When the world pice is _____ the domestic price, the domestic industry has the comparative advantage.
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above
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If the domestic industry has a comparative advantage than the domestic industry _____ to the world.
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exports
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Why do exports enhance the welfare of the domestic country?
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Producer surplus increases more than consumer surplus decreases
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When the world price is _____ the domestic price, foreign producers have the comparative advantage.
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below
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If the foreign producer has a comparative advantage then the domestic industry _____ from the world.
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imports
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Why do imports enhance the welfare of the domestic country?
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Consumer surplus increases more than producer surplus decreases
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A tax placed on imports
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tariff
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Does the tariff directly or indirectly affect the domestic price charged on imports?
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directly
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Tariffs result in...
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1. Higher Domestic prices
2. Under-consumption 3. Over-production 4. Less imports to the domestic market |
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A maximum quantity placed on imports
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quota
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Does a quota directly or indirectly affect the domestic price?
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indirectly
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Quotas result in...
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1. Higher Domestic Price
2. Under-consumption 3. Over-production 4. Less imports to the domestic market |
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What is the major differences between quotas and tariffs?
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Tariffs raise revenue and quotas don't. Also quotas can result in more inefficiency.
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Reasons for trade Restrictions
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1. National Defense Reasons
2. Retaliation against dumping 3. Infant Industry Argument 4. Special Interests Influences |
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What type of political issue would trade regulations be classified as?
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Interest Group Politics
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