Select a developed country that has implemented a tariff and a developing country that manufactures products that are affected by that same tariff. Investigate the impact of the trade barrier on the developing country's business sector; quantify the impact if possible. Would you recommend that the developed country eliminate the tariff?
Select a developed country that has implemented a tariff and a developing country that manufactures products that are affected by that same tariff. Investigate the impact of the trade barrier on the developing country's business sector; quantify the impact if possible. Would you recommend that the developed country eliminate the tariff?
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4) Assume the following table shows the yields per acre of wine grapes and olive oil in two different countries. Country A and country Z. (Also assume that in each country the labor and other processing costs per acre are the same regardless of whether grape vines or olive trees are cultivated).
|
Country A |
Country Z |
|
|
Olive Oil yield |
75 barrels |
40 barrels |
|
Grape yield |
90 barrels |
60 barrels |
Suppose initially each country had erected high tariff barriers to keep out foreign wine and/or olive oil and was producing for its own needs only.
Could consumers in both countries benefit if all trade barriers were dropped? If not, explain why not. If consumers could benefit, explain how and identify: a) which country has the greater opportunity cost of producing olive oil; b)the country which would end up exporting wine and which would export olive oil after the elimination of trade barriers. 6 pts
