Lecture 5

Question 1

single market

Answer 1

aims to unify the countries

Question 2

what’s stopping the single market

Answer 2

1) non-tariff barriers eg. health standards
2) physical barriers eg boarder control
3) tax barriers

Question 3

gains from removing barriers

Answer 3

1) cost saving and specialization
2) economies of scale
3) increased competition

Question 4

assumptions of the single market model

Answer 4

1) partial equlibrium- ignore impact on other markets
2) only two countries- ignore rest of the world
3) start with non-tariff barriers= no trade at the start
4) perfect competition- firms are price takers
5) comparative static- happens instantly