ECON 2610 Lecture 9: Week 9 Notes

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Week 9 Notes
Cause of CA
Can be a lot some from each model
This model adds profit
Monopolistic Competition/Oligopoly
Always trying to change the product to differentiate from your competitor
o Color change even works
Monopolistic competition
Each firm behaves as if it were monopolistic
More sales the lower the price is from your competitor
WTO
Countries have to be treated equally
No 1 firm/country should treat another firm/country differently
EX: if one country (within WTO) makes a trade agreement with another, that
same agreement applies to all others
o AS LONG AS MEMBER OF WTO
Cannot discriminate by making others higher, only able to discriminate by
making ours lower
o Don’t give up sovereignty, but don’t raise tariffs
WTO cant make own policies, the countries do it
National Treatment (WTO)
Products have to be treated equally
EX: Qualifications of beef in US
o Prime
o Choice
o Select
If US imports beef from Canada, must classify meat the same
o NTBs non tariff barriers
NTBs
Import licensing
o Costs more for a contracting license if not american
Rules for the valuation of goods at customs
o May cost 3x more
Pre-shipment inspection, further checks on imports
o Every product gets inspected this costs money and time consuming
Rules on origin
Exceptions
General
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