Flashcards in Economics 5 Deck (10):
What is a Tariff?
A tax on imported goods
What is a quota?
A limit on the number of goods that can be imported
How do international trade restrictions affect domestic producers?
They are good for domestic producers.
Demand curve shifts right
They can charge higher prices
How to international trade restrictions affect foreign producers?
They are bad for foreign producers
Demand curve shifts left
They must charge lower prices
How do international trade restrictions affect foreign consumers?
They are good for foreign consumers
Supply curve shifts right
Goods purchased at lower prices in the foreign markets
How do international trade restrictions affect domestic consumers?
They are bad for domestic consumers
Supply curve shifts left
Fewer goods bought due to higher prices
What is Accounting Cost?
Explicit (Actual) cost of operating a business
Implicit costs are opportunity costs
What is Accounting Profit?
Revenue - Accounting Cost
What is Economic Cost?
Explicit + Implicit Cost