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International Economics (Fach) / International Trade due to comparative advantage (Lektion)
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- What is a tariff? (2) tax on goods produced abroad and sold domestically raises the price of the imported goods above the world price by the amount of the tariff
- What is an import quota? limit on the quantity of imported goods
- What is a deadweight loss? loss of economic efficiency
- Quota: Why are domestic buyers worse off and domestic producers better off? Raises the domestic price above the world price
- Quota: What happens to the license holders? profit due to buying it at the world price and selling it at a higher domestic price
- Quota: What happens to the license holders? profit due to buying it at the world price and selling it at a higher domestic price
- Quota: What happens to the license holders? profit due to buying it at the world price and selling it at a higher domestic price
- Comparative Advantage (2): producer with smaller opportunity costs has a compartive advantage a low domestic price, indicates that a country has a comparative advantage
- What are the welfare effects for producers and consumers in an exporting country? producers get better off consumers get worse off
- What are the welfare effects of tariffs?(2) a tariff reduces the import quantity it reduces the total surplus of a domestic market
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- What are the welfare effects of tariffs?(2) a tariff reduces the import quantity it reduces the total surplus of a domestic market
- name three reasons for trade restrictions protecting jobs defending national security helping infant industries