trade and protectionism(econdal)

Question 1

what are the benefits of free trade(4)

Answer 1

• allocative efficiency(comparatiuve advantage)
• lower prices(competition , economies of scale)
• economic growth(X-M)
• technology diffusion(higher profits, easier to copy technology)

Question 2

what are the types of protectionism

Answer 2

• quotas
• tariffs
• admin barriers(red tape)

Question 3

what are 4 reasons for protectionism

Answer 3

• dumping
• unemployment
• Gov. revenue
• resolve trade deficit

Question 4

what are 3 evaluation points for tariffs

Answer 4

• higher prices
• reduced quantity and choice
• retaliation