We have shown that all individuals and countries can gain from trade. What are some of the reasons why some individuals or countries may object to free trade? Select all that apply. Multiple answers:Multiple answers are accepted for this question a International trade increases susceptibility to global shocks. b Some individuals may lose their job or business as a result of competition from abroad. c International trade can result in greater specialization and therefore higher production and consumption by both countries. d Higher competition as a result of international trade may hurt consumers. Part b: Imagine that the U.S. establishes a tariff on an imported good. Under which of the following situations would the U.S. consumers have to pay a larger proportion of the tariff? a If demand for the imported good is relatively inelastic. b If demand for the imported good is relatively elastic. c If demand for the imported good is infinitely elastic. d The incidence of tariff does not depend on the elasticity of demand. Part C: Which of the following is an advantage associated with limiting the number of imports coming into the country? a Consumers end up paying higher prices b Consumption of domestic goods increases c Loss of increased production from specialization d Retaliation by other countries

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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We have shown that all individuals and countries can gain from trade. What are some of the reasons why some individuals or countries may object to free trade? Select all that apply.

Multiple answers:Multiple answers are accepted for this question

a International trade increases susceptibility to global shocks.

b Some individuals may lose their job or business as a result of competition from abroad.

c International trade can result in greater specialization and therefore higher production and consumption by both countries.

d Higher competition as a result of international trade may hurt consumers.

Part b:

Imagine that the U.S. establishes a tariff on an imported good. Under which of the following situations would the U.S. consumers have to pay a larger proportion of the tariff?

a If demand for the imported good is relatively inelastic.

b If demand for the imported good is relatively elastic.

c If demand for the imported good is infinitely elastic.

d The incidence of tariff does not depend on the elasticity of demand.

Part C:

Which of the following is an advantage associated with limiting the number of imports coming into the country?

a Consumers end up paying higher prices

b Consumption of domestic goods increases

c Loss of increased production from specialization

d Retaliation by other countries

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