ECON10004 Study Guide - Final Guide: Infant Industry Argument, Import Quota
25 May 2018
School
Department
Course
Professor
World price = price of a good that prevails in the world market for that good
If world price > domestic price, country becomes exporter
If world price < domestic price, country becomes importer
Comparative advantage when domestic price is low
Domestic producers are better off
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Domestic consumers are worse off
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Gains > losses
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> trade raises economic wellbeing
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In an exporting country
Domestic producers are worse off
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Domestic consumers are better off
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Gains > losses
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> trade raises economic wellbeing
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In an importing country
Tariff = tax on goods produced abroad and sold domestically
Import quota = limit on quantity of a good produced abroad that can be sold domestically
Trade destroys domestic jobs
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National security argument
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Infant industry argument
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Unfair competition argument
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Protection as a bargaining chip argument
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Arguments for restricting trade:
Determinants of trade
Thursday, 23 March 2017 1:42 PM
Intro Micro Page 1
