4.1.6

Question 1

What is a Tariff?

Answer 1

A tax on imports.

Question 2

One benefit of a tariff?

Answer 2

Raise in tax revenue.

Question 3

What is a Quota?

Answer 3

Strict limit on quantity of goods imported.

Question 4

Negative of Quota

Answer 4

No tax revenue
could cause shortages of specific imports

Question 5

Subsides to domestic Suppliers What is it?

Answer 5

When a government gives grants to producers within the country to increase supply.

Question 6

Negative of subsides to firms?

Answer 6

Costs the government.

Question 7

What is a Non-tariff barrier to entry?

Answer 7

Regulations regarding health and safety, environmental and labelling of products.

Question 8

What are 4 reasons to restrict trade and what are they?

Answer 8

Dumping (Foreign firms lowering prices extremely low to drive out competition)

Protect domestic Employment ( Prevent unemployment domestically)

Protecting infant industries (Protects new firms that are unlikely to succeed due to level of competition, due to firms abroad using economies of scale)

Health and safety