What are the 4 factors of production that result in trade?
The reason that countries trade is because the ____________ ____________ of trading is less than the cost of producing it yourself. (2 words)
Sort the following
G/S that enter a country
G/S that exit a country
Imports
Exports
Who has absolute advantage in chocolate bars? Why? (Don't forget to mention both inputs, outputs and quantities)
Who has absolute advantage in cakes? Why? (Don't forget to mention both inputs, outputs and quantities)
Who has comparitive advantage in chocolate bars? Why? (Don't forget to mention costs and values)
Who has comparitive advantage in cakes? Why? (Don't forget to mention costs and values)
Match up the definition for the 4 types of trade barriers
Limits on the quantity of imports
Self-imposed limits on the quantity of exports
Taxes on imports
Payments to the producers of certain goods for export or to producers competing against imports
Export Restrictions
Quotas
Subsidies
Tarriffs
Free Trade vs. Protectionism
• Promotes efficient production
• Lowers prices
• Increases consumption
• Stimulates economic growth
• Increases structural unemployment
• Weakens infant industries
• Safeguards domestic industries and jobs
• Insulates infant industries
• Allocates resources inefficiently
• Raises prices
• Limits variety of goods and services
• Discourages innovation
Pro of Free Trade
Con of Free Trade
Pro of Protectionism
Con of Protectionism
Check off the impacts of an import quota or tariff on the importing and exporting country.
Importing country (Country that imposes that quota) | Exporting Country | |
|---|---|---|
Total Supply Falls | ||
Total Supply Rises | ||
DWL | ||
Domestic Prices Rise | ||
Domestic Prices Fall | ||
Less Competition | ||
Hopefully domestic industries produce more. | ||
Less foreign units are imported |