Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 34, Problem 28RQ
What is dumping? Why does prohibiting it often work better in theory than in practice?
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What is dumping? Why is this done?
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Dumping refers to the idea of selling goods for below their cost of production. Briefly explain the two scenarios why foreign firms may export a product at less than its cost of production (therefore, earning a negative profit on the good).
Chapter 34 Solutions
Principles of Economics 2e
Ch. 34 - Explain how a tariff reduction causes an Increase...Ch. 34 - Explain how a subsidy on agricultural goods like...Ch. 34 - Explain how trade barriers save jobs in protected...Ch. 34 - Explain how trade barriers raise wages in...Ch. 34 - How does international trade affect working...Ch. 34 - Do the jobs for workers in low-income countries...Ch. 34 - How do trade barriers affect the average Income...Ch. 34 - How does the cost of saving jobs in protected...Ch. 34 - Explain how predatory pricing could be a...Ch. 34 - Why do low-income countries like Brazil, Egypt, or...
Ch. 34 - Explain the logic behind the race to the bottom...Ch. 34 - What are the conditions under which a country may...Ch. 34 - Why is the national security argument not...Ch. 34 - Assume a perfectly competitive market and the...Ch. 34 - What is the difference between a free trade...Ch. 34 - Why would countries promote protectionist laws,...Ch. 34 - What might account for the dramatic increase in...Ch. 34 - How does competition, whether domestic or foreign,...Ch. 34 - What are the gains from competition?Ch. 34 - Who does protectionism protect? From what does it...Ch. 34 - Name and define three policy tools for enacting...Ch. 34 - How does protectionism affect the price of the...Ch. 34 - Does international trade, taken as a whole,...Ch. 34 - Is international trade likely to have roughly the...Ch. 34 - How is international trade, taken as a whole,...Ch. 34 - Is international trade likely to have about the...Ch. 34 - What are main reasons for protecting infant...Ch. 34 - What is dumping? Why does prohibiting it often...Ch. 34 - What is the race to the bottom scenario?Ch. 34 - Do the rules of international trade require that...Ch. 34 - What is the national interest argument for...Ch. 34 - Name several of the international treaties where...Ch. 34 - What is the general trend of trade barriers over...Ch. 34 - If opening up to free trade would benefit a...Ch. 34 - Who gains and who loses from trade?Ch. 34 - Why is trade a good thing if some people lose?Ch. 34 - What are some ways that governments can help...Ch. 34 - Show graphically that for any tariff, there is an...Ch. 34 - From the Work It Out Effects of Trade Barriers,...Ch. 34 - If trade barriers hurt the average worker in an...Ch. 34 - Why do you think labor standards and working...Ch. 34 - How would direct subsidies to key industries be...Ch. 34 - How can governments identify good candidates for...Ch. 34 - Microeconomic theory argues that it is...Ch. 34 - How do you think Americans would feel if other...Ch. 34 - Is it legitimate to impose higher safety standards...Ch. 34 - Why might the unsafe consumer products argument be...Ch. 34 - Why might a tax on domestic consumption of...Ch. 34 - Why do you think that the GAIT rounds and, more...Ch. 34 - An economic union requires giving up some...Ch. 34 - What are some examples of innovative products that...Ch. 34 - In principle, the benefits of international trade...Ch. 34 - Economists sometimes say that protectionism is the...Ch. 34 - Trade has income distribution effects. For...Ch. 34 - Assume two countries, Thailand (T) and Japan (J),...Ch. 34 - You have just been put in charge of trade policy...Ch. 34 - The country of Pepperland exports steel to the...
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Similar questions
- Summarize the arguments in support of restricting imports.arrow_forwardWhat does national security have to do with trade barriers?arrow_forwardResponding to a case brought by the Dillon Corporation, Florida of U.S., for the purpose to expand China paper anti-dumping tariff, the U.S. Commerce Department announced it was imposing a tariff of 99 percent on imported glossy paper from China. Glossy paper is the type of paper used to manufacture art books, high-end magazines, textbooks, and annual reports. In 2016 imports of glossy paper from China was estimated to be $224 million. What is dumping? Who in the U.S. loses from China’s dumping of glossy paper? What argument might Dillon Corporation, have used to persuade the U.S. Commerce Department to impose a 99 percent tariff? Explain who, in the United States, will gain and who will lose from the tariff on glossy paper. How do you expect the prices of magazines and textbooks that you buy to change?arrow_forward
- List and briefly describe the principal restrictions that may be applied to a nation’s imports.arrow_forwardWhat measures do governments take to promote exports and restrict imports? Who benefifits and who loses from protectionist policies? What is the net outcome for society?arrow_forwardIs it True or False that A border outlines an area that a particular governing body controls.arrow_forward
- Why are some economists who favor free trade concerned about the proliferation of regional trade agreements?arrow_forwardIn the chapter, we described a situation where dumping occurs between two symmetric countries. Briefly describe how things would change if the two countries had different sizes. a. How would the number of firms competing in a particular market affect the likelihood that an exporter to that market would be accused of dumping? (Assume that the likelihood of a dumping accusation is related to the firm's price difference between its domestic price and its export price: the higher the price difference, the more likely the dumping accusation.) As the number of firms competing in a particular market increases, the price charged by exporters (and domestic firms) will fall, increasing the probability that a dumping charge will be filed. b. Would a firm from a large country be more or less likely to be accused of dumping when it exports to a small country (relative to a firm from the small country exporting to the large country)? A firm exporting from a large country to a small country will be…arrow_forwardWhich of the following is an objective of dumping? To Sell Surplus Commodity All of the above To Find a Place in the Foreign Market Expansion of Industryarrow_forward
- what is the rational for a country that promotes free trade to put tariffs on some imported goods and services?arrow_forwardList three reasons (along with a thorough explanations) that trade can be beneficial to the environment. What is the Environmental Kuznets Curve? What are the justifications of it?arrow_forwardA large or small country imposing a tariff can benefit in terms of social welfare?arrow_forward
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