Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 33, Problem 10QP
To determine
The position about the imposing of trade restricting measures by the federal government.
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Should the Trade Embargo on Cuba Be Lifted? Three years after Fidel Castro took power in Cuba and installed a Communist regime, the U.S. government initiated a trade embargo against the nation. The embargo was intended to put economic pressure on the Cuban government. Today the embargo is still in effect— one of the longest trade embargos in modern history. Opponents on each side of the issue debate its effectiveness. Who is right? As you read the selections, ask yourself: Should the trade embargo on Cuba be lifted or remain in place? PRO A HALF-CENTURY OF FAILURE For almost half a century, the U.S. government has tried to isolate Cuba economically in an effort to undermine the [Communist] regime [of Fidel Castro] and deprive it of resources. Since 1960, Americans have been barred from trading with, investing in, or traveling to Cuba. . . . As a foreign policy tool, the embargo actually enhances Castro’s standing by giving him a handy excuse for the failures of his…
Identify and explain who will make and lose money from this tariff.
Identify the people and organizations that will benefit from the tariff.
Identify the people and organizations that will suffer because of the tariff.
How will the tariff impact your company?
Why would an importing country use a tariff rather than a quota?
Chapter 33 Solutions
Economics (MindTap Course List)
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- Would the U.S. government gain any advantage from using tariffs or quotas to restrict imports?arrow_forwardAnalyze the Economic Effects of Tariffs and Quotas. Give examples.arrow_forwardWhat benefits do export quotas provide? In your opinion, what does the U.S produce that would benefit the American people if an export quota was put in place on it?arrow_forward
- What is the effect of placing tariffs on products imported into the U.S. from other countries? Are there any problems with this?arrow_forwardSubject 3: Protectionism The supply and demand for wheat in the small country Tinyland are: Q$ = P and Qª 400 – P, respectively. The world price of wheat is Py = 100. a. Suppose the government imposes an import quota on wheat Q i. Find the price of wheat in Tinyland. ii. Find the tariff per unit that generates the same volume of trade as the quota. iii. Next suppose that instead of a quota or a tariff, the government levies a specific (per unit) consumption tax on wheat. Find the price of wheat in Tinyland when the tax is equal to the tariff you found in part ii and the quantity of wheat imported. NB: In contrast to a tariff, which is levied on all units produced abroad (imported), a consumption tax is levied on all units sold in the domestic market regardless of where they were produced, = 100. b. Which of these three policies, i.e., quota, tariff, and consumption tax, do consumers and producers prefer? Give precise answers by evaluating the welfare of each group. Assuming that the…arrow_forwardSummarize the arguments in support of restricting imports.arrow_forward
- Identify the various types of tariffs and their purpose.arrow_forwardCan you answer this please? Explain the concept of a trade embargo and its effect on the country where the embargo has been placed.Discuss the economic rationales for Governments to intervene in international trade which would affect their country.arrow_forwardWho benefits from tariffs? Government or domestic industries?arrow_forward
- If an import quota is imposed on imports of shrimp into the United States, U.S. consumers ________ and the U.S. economy will ________. lose; lose gain; lose lose; gain gain; gain gain; be unaffected When a tariff supporter argues that foreign producers are selling their products for prices below the costs of production, which of the following is being used? save domestic jobs argument national security argument dumping argument diversity and stability argument infant-industry argument A flawed argument for protection from foreign trade is that i. tariffs save domestic jobs. ii. tariffs protect the national culture. iii. quotas bring about diversity and stability. i only ii only i, ii, and iii iii only i and ii Suppose IBM purchases a factory in Japan. This purchase is entered into which of the balance of payments accounts? current account official settlements account capital and financial account trade account…arrow_forwardIn the picture below is the full question. The highlighted one is my guess which is wrong. Which of the following best explains how subsidies work as a trade restriction? A)They increase competition for a new business, forcing it to be more productive, and lowering prices for consumers. B)They limit the import of foreign goods and create shortages. C)They place a tax on foreign goods, making foreign good expensive, increasing demand for domestic goods(this one is wrong) D)Governments pay producers, offsetting costs, increasing supply, lowering prices, and reducing foreign competition.arrow_forwardName and describe at least one international organization or trade agreement which has sought to lower the barriers against trade between nations.arrow_forward
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