Tariffs and trade policies Flashcards
1
Q
what are the advantages of free trade
A
- specialisation that creates comparative advantage
- decreased costs
- increased competition
2
Q
what are the disadvantages of free trade
A
- infant industries suffer
- goods with little dynamic potential or fluctuating markets suffer
- dumping can occur
- foreign monopolies
- self-sufficiency/ national security
- protection of culture/ human rights/ environment
3
Q
what is comparative advantage
A
when a country is able to produce a good with a lower opportunity cost than another
4
Q
is a small country better or worse off if they impose a tariff
A
worse off but the domestic producers are better off
5
Q
A
