뒤로Step-by-Step Guidance for International Trade (Macroeconomics, Chapter 15)
스터디 가이드 - 스마트 노트
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Key Terms:
Imports: Goods and services produced in foreign countries and purchased by residents of the domestic country
Exports: Goods and services produced domestically and sold to buyers in other countries.
Topic: Open Economy and Trade
Key Terms:
Open Economy: An economy that engages in international trade.
Closed Economy: An economy that does not trade with other countries.
When an economy is open to trade, it can import goods that are cheaper to produce abroad and export goods in which it has a comparative advantage. This leads to changes in domestic prices, production, and consumption, generally increasing overall economic welfare but creating winners and losers among consumers and producers.
Key Terms and Concepts:
World Price: The price of a good on the international market.
Domestic Price: The price of a good in the domestic market without trade.
Equilibrium: The point where supply equals demand.
With imports, the domestic price falls to the world price, domestic consumption increases, and domestic production decreases. Consumers gain from lower prices, while producers may lose due to increased competition.
Topic: Market Equilibrium with Exports
Key Terms and Concepts:
World Price
Domestic Price
Producer and Consumer Surplus
With exports, the domestic price rises to the world price, domestic production increases, and domestic consumption decreases. Producers gain from higher prices, while consumers may lose due to increased prices.
Q11b. Who gains and who loses from exports?
Background
Topic: Welfare Effects of Trade
This question is about identifying the winners and losers when a country exports goods.
Key Terms:
Producer Surplus
Consumer Surplus
Step-by-Step Guidance
Recall that exports raise domestic prices to the world price.
Consider how this affects producers (higher prices, more sales).
Consider how this affects consumers (higher prices, less consumption).
Try solving on your own before revealing the answer!
Final Answer:
Producers gain from exports due to higher prices and increased sales, while consumers lose because they pay higher prices and consume less.
Q11c. Who gains and who loses from imports?
Background
Topic: Welfare Effects of Trade
This question is about identifying the winners and losers when a country imports goods.
Key Terms:
Producer Surplus
Consumer Surplus
Step-by-Step Guidance
Recall that imports lower domestic prices to the world price.
Consider how this affects consumers (lower prices, more consumption).
Consider how this affects producers (lower prices, less production).
Try solving on your own before revealing the answer!
Final Answer:
Consumers gain from imports due to lower prices and increased consumption, while producers lose because they receive lower prices and sell less.
Q12. What is a tariff?
Background
Topic: Trade Barriers
This question is about understanding the definition and purpose of tariffs in international trade.
Key Terms:
Tariff: A tax imposed on imported goods.
Step-by-Step Guidance
Recall the definition of a tariff.
Think about why governments impose tariffs (e.g., to protect domestic industries).
Consider the effect on prices and trade flows.
Try solving on your own before revealing the answer!
Final Answer:
A tariff is a tax imposed by a government on imported goods, usually to protect domestic producers or raise government revenue.
Q12a. What are the effects of a tariff? (Fig. 15.3)
Background
Topic: Effects of Trade Barriers
This question is about the economic effects of imposing a tariff, as illustrated in Figure 15.3.
Key Terms:
Tariff
Consumer Surplus
Producer Surplus
Deadweight Loss
Step-by-Step Guidance
Recall that a tariff raises the price of imported goods.
Consider how this affects domestic prices, production, and consumption.
Analyze the changes in consumer and producer surplus.
Identify the deadweight loss created by the tariff.
Try solving on your own before revealing the answer!
Final Answer:
A tariff increases the price of imports, reduces the quantity imported, benefits domestic producers, harms consumers, and creates deadweight loss due to reduced total welfare.
Q12b. Who wins and who loses from the imposition of a tariff?
Background
Topic: Distributional Effects of Trade Barriers
This question is about identifying the winners and losers when a tariff is imposed.
Key Terms:
Consumer Surplus
Producer Surplus
Government Revenue
Step-by-Step Guidance
Recall that tariffs raise prices for consumers.
Consider how domestic producers benefit from higher prices.
Think about government revenue from the tariff.
Identify the deadweight loss and who bears it.
Try solving on your own before revealing the answer!
Final Answer:
Domestic producers and the government (via tariff revenue) gain, while consumers lose due to higher prices and reduced choices. There is also a deadweight loss to society.
Q13. What is an import quota?
Background
Topic: Trade Barriers
This question is about understanding the definition and purpose of import quotas.
Key Terms:
Import Quota: A limit on the quantity of a good that can be imported.
Step-by-Step Guidance
Recall the definition of an import quota.
Think about how quotas restrict the supply of imported goods.
Consider the effect on domestic prices and production.
Try solving on your own before revealing the answer!
Final Answer:
An import quota is a government-imposed limit on the quantity of a specific good that can be imported into a country.
Q13a. What are the effects of an import quota? (Fig 15.4)
Background
Topic: Effects of Trade Barriers
This question is about the economic effects of imposing an import quota, as illustrated in Figure 15.4.
Key Terms:
Import Quota
Consumer Surplus
Producer Surplus
Quota Rents
Step-by-Step Guidance
Recall that an import quota restricts the quantity of imports.
Consider how this affects domestic prices, production, and consumption.
Analyze the changes in consumer and producer surplus.
Identify who receives quota rents (the value of the restricted imports).
Try solving on your own before revealing the answer!
Final Answer:
An import quota raises domestic prices, benefits domestic producers, harms consumers, and creates quota rents for those who have the right to import. It also causes deadweight loss.
Q13b. Who wins and who loses from the imposition of an import quota?
Background
Topic: Distributional Effects of Trade Barriers
This question is about identifying the winners and losers when an import quota is imposed.
Key Terms:
Consumer Surplus
Producer Surplus
Quota Rents
Step-by-Step Guidance
Recall that quotas raise prices for consumers.
Consider how domestic producers benefit from higher prices.
Think about who receives quota rents (import license holders).
Identify the deadweight loss and who bears it.
Try solving on your own before revealing the answer!
Final Answer:
Domestic producers and import license holders gain, while consumers lose due to higher prices and reduced choices. There is also a deadweight loss to society.
Q13c. How is an import quota similar to a tariff?
Background
Topic: Comparison of Trade Barriers
This question is about comparing the effects of import quotas and tariffs.
Key Terms:
Tariff
Import Quota
Step-by-Step Guidance
Recall that both tariffs and quotas restrict imports.
Consider how both raise domestic prices and benefit domestic producers.
Think about the impact on consumer surplus and deadweight loss.
Try solving on your own before revealing the answer!
Final Answer:
Both import quotas and tariffs restrict imports, raise domestic prices, benefit domestic producers, harm consumers, and create deadweight loss.
Q13d. How is it different from a tariff?
Background
Topic: Comparison of Trade Barriers
This question is about the differences between import quotas and tariffs.
Key Terms:
Tariff
Import Quota
Quota Rents
Step-by-Step Guidance
Recall that tariffs generate government revenue, while quotas create quota rents.
Consider who benefits from quota rents (import license holders).
Think about the flexibility of tariffs versus the fixed nature of quotas.
Try solving on your own before revealing the answer!
Final Answer:
Tariffs generate revenue for the government, while quotas create quota rents for license holders. Quotas strictly limit quantity, while tariffs allow import quantity to adjust based on price.
Q14. What are other import barriers?
Background
Topic: Trade Barriers
This question is about identifying other types of barriers to imports besides tariffs and quotas.
Key Terms:
Non-tariff Barriers
Regulations
Subsidies
Step-by-Step Guidance
Recall examples of non-tariff barriers (e.g., regulations, standards).
Consider how these barriers restrict imports indirectly.
Think about subsidies to domestic producers as a form of import barrier.
Try solving on your own before revealing the answer!
Final Answer:
Other import barriers include technical regulations, product standards, licensing requirements, and subsidies to domestic producers.
Q15. What are the arguments for restricting international trade?
Background
Topic: Policy Arguments
This question is about understanding the main arguments used to justify trade restrictions.
Key Terms:
Protectionism
Infant Industry Argument
National Security Argument
Job Protection
Step-by-Step Guidance
Recall common arguments for trade restrictions (e.g., protecting jobs, national security).
Consider the infant industry argument.
Think about concerns over unfair competition and trade deficits.
Try solving on your own before revealing the answer!
Final Answer:
Arguments for restricting trade include protecting domestic jobs, national security, supporting infant industries, preventing unfair competition, and reducing trade deficits.
Q16. What are their counter-arguments?
Background
Topic: Policy Arguments
This question is about understanding the counter-arguments to trade restrictions.
Key Terms:
Free Trade
Comparative Advantage
Consumer Welfare
Step-by-Step Guidance
Recall the benefits of free trade (e.g., efficiency, lower prices).
Consider the argument that trade restrictions reduce overall welfare.
Think about the role of comparative advantage in increasing total output.
Try solving on your own before revealing the answer!
Final Answer:
Counter-arguments include that trade increases efficiency, lowers prices, benefits consumers, and allows countries to specialize based on comparative advantage, raising overall welfare.
Q17. What are the two key reasons for restricting international trade?
Background
Topic: Policy Arguments
This question is about identifying the two main reasons governments restrict trade.
Key Terms:
National Security
Infant Industry Protection
Step-by-Step Guidance
Recall the most commonly cited reasons for trade restrictions.
Think about national security concerns.
Consider the need to protect new industries from foreign competition.
Try solving on your own before revealing the answer!
Final Answer:
The two key reasons are national security and protection of infant industries.
