What impact would a tariff on imported textile goods into the US have on domestic textile production?
It will increase domestic production
When Korea exports steel into another country there are winners and losers. Who wins and who loses?
Producers of steel win and users of steel lose
If a country has a comparative advantage in the production of a good, then that country:
has a lower opportunity cost in the production of that good
What is a quota?
a limit on the quantity of imported goods
As trade barrier, a tariff:
Tends to result in the deadweight loss or decrease the welfare of both consumers and producers
Whena country engages in free trade, there is a net gain from the trade for the country, but there are always winners and losers in a trading company. True or False?
True
If a country sells its product at a cheaper price in another country than it would in its own country, this is called ______.
Dumping
Economic efficiency means maximizing:
total economic well being
Consumer surplus can be defined as
the extra benefit that consumers realize as a result of the difference between Pw - Pa
Producer surplus can be defined as
the extra benefit that producers realize as a result of the difference between what they actually receive and the minimum price they are willing to accept to produce anything
What happens to the consumer surplus when the product price rises?
Consumer surplus decreases
What happens to the producer surplus when the product price rises?
Producer surplus increases
What kind of production do tariffs increase?
Domestic Production