Chapter 14.3 Flashcards
Trade protection
Government intervention in international trade through the imposition of trade restrictions to prevent the free entry of imports into a country
Tariff
Taxes on imported goods
Winners from tariffs
Domestic producers
Domestic employment in the protected industry increases
Government gains tariff revenue
Losers from tariffs
Domestic consumers
Domestic income distribution
Increase inefficiency in production
Foreign producers
Global misallocation of resources
Import quota
A legal limit to the quantity of a good that can be imported over a particular time period
Winers from import quotas
Domestic producers
Domestic employment increases
Neutral impact of import quotas
Government neither gains or loses
Losers from import quotas
Domestic consumers
Domestic income distribution worsens
Increased inefficiency in production
Exporting countries may be worse or better off
Global misallocation of resources
Winners from production subsidies
Domestic producers
Domestic employment increases
Neutral impact of production subsidies
Consumers
Loser from production subsidies
The government budget
Taxpayers
Increased inefficiency in production
Exporting countries
Global misallocation of resources results
Export subsidies
A payment by the government per unit of the subsidized good for each unit of the good that is exported
Winners from export subsidies
Producers
Domestic employment
Losers from export subsidies
Consumers
Government budget
Taxpayers
Domestic income distribution
Increased inefficiency in production
Exporting countries
Increase in global misallocation of resources
Administrative barriers
Procedures and requirements imposed by governments that may reduce the quantity of imports
