consequences of protectionism Flashcards
1
Q
4 consequences for protectionism
A
- high prices
- economic welfare
- productive inefficiency
- opportunity cost
2
Q
how is high prices a consequence for protectionism
A
restricted supply of imports and the tariff that is often placed on them
3
Q
how is economic welfare a consequence for protectionism
A
on the tariff diagram welfare loss associated with allocative inefficiency - loss of consumer surplus
4
Q
how is productive inefficiency a consequence for protectionism
A
by protecting domestic industries they are discouraged from becoming productively efficient.
5
Q
how is opportunity cost a consequence for protectionism
A
many forms of protectionism have a huge opportunity cost associated with them. Could the money have been better spent elsewhere?
