Lecture 3

Question 1

assumptions of the partial equilibrium model

Answer 1

1) focus on one market ignore knock-off effects
2) perfect competition hence- supply curve reflects opportunity cost
3) world of 3 countries
4) start with given non-preferential tariff

Question 2

non-preferential tariff

Answer 2

imports from partner and world face same tariff - no discrimination

Question 3

look in notes for diagrams and the welfare implications

Answer 3

Look in black folder