Chapter 9 Flashcards
What situation leads to importing?
When domestic consumption is greater than production.
What is protectionism?
The economic policy of restraining trade through quotas, tariffs, or other regulations that burden foreign producers but not domestic producers.
What is a tarrif?
a tax on imports.
What is a quota?
Restrictions on the quantity of goods that can be imported.
The world price plus tariff is = ?
Tariff equilibrium
What is the world price = ?
tariff-less equilibrium
What is and where is the tariff revenue on a graph?
It is the difference between the Q(demanded) Tariff imposed and the Quantity supplied with the tariff imposed.
What are the effects of implementing a tariff?
- domestic suppliers respond to the higher price by increasing production.
- Domestic consumers respond to the elevated prices by purchasing less.
- Imports decrease.
What is government revenue = to in regard to when a tariff is imposed?
GR = tariff amount x Q (imports)
What does Autarky mean?
No Trade
