ECO 1000 Lecture Notes - Lecture 49: Absolute Advantage, Comparative Advantage, Infant Industry Argument
Document Summary
The sale of a good by a foreign supplier in another country at a price below that charged by the supplier in its home market. Which of the following restricts the volume of international trade? quotas. Which of the following provides the foundation of the case for free trade? the law of comparative advantage. A major difference between a tariff and a quota is that a tariff typically generates tax revenue, while a quota does not. A tariff is a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported. It requires fewer resources in a to produce the good than in b. In recent years, the largest trading partners of the united states have been canada, mexico, china and japan. Which of the following about trade is true? specialization and trade leads to mutual gains for countries.
