Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Chapter 34, Problem 42CTQ
How would direct subsidies to key industries be preferable to tariffs or quotas?
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In South Korea's state-led industrialization, export subsidies allowed South Korean products (from Samsung, Hyundai) to be sold all over the world. Compare and contrast export subsidies to import tariffs. Which factor might lead a country to decide on one or the other?
If tariffs, quotas, and subsidies each cause net welfare losses, why are they so common, especially in agriculture, among the industrialized countries such as the United States and the members of the European Union?
Which of the following is NOT a common reason why tariffs are used despite being inefficient?
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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- Who benefits from tariffs? Government or domestic industries?arrow_forwardThe Nigerian president decreases the amount of imported tea allowed into the country by 100 million pounds per year. Which trade is this?arrow_forwardWhen should a company consider expanding from strictly domestic trade to international trade?arrow_forward
- In how many categories, imports have been classified?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_forwardDirect investment should only be used when there is a low chance of success and the market has weak potential the market is stable and flat there is a low chance of success and the market has strong potential there is a high chance of success and the market has strong potential there is a high chance of success and the market has weak potentialarrow_forward
- A large or small country imposing a tariff can benefit in terms of social welfare?arrow_forwardWhen a large country imposes a tariff for a certain good it imports,it often affects the foreign price of the good as well. Is this statement true? Justify the answerarrow_forwardWould consumers benefit more from a tariff or a quota on importsarrow_forward
- What are used to convince other governments to voluntarily limit their exports and are in effect export quotasarrow_forwardIn 2009, US imposed a tariff of 35% on radial car tires imported from China. The winners from this tariff are US producers and there was tariff revenue earned from this tariff. Trade restrictions are quite common in international trade. Can you argue in favor of this type of trade restriction ? Do we have a national security argument, infant industry argument or a dumping argument and whyarrow_forwardWhy might the use of a tariff to decrease aggregate unemployment in a country eventually generate an increase in aggregate unemployment in that country?arrow_forward
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