answer to exercises Ch 12

2a. Consumers would certainly see a hike in prices on the imported product and in turn could affect the consumer’s ability to afford neither the domestic made clothing nor foreign made clothing.

b. Look at the Tariff Chart on page A57 of the Appendix. At their peak in 1828, tariff duties on imported goods amounted to 60 percent of their value. In 1996, that tariff rate amounted to only about 5 percent. The authors say

3. Suppose that before trade takes place, the United States is at a point on its PPC where it produces 20 loaves of bread and 20 units of steel. Once trade becomes possible, the price of a unit of steel is 2 units of bread. In response, the United States moves along its PPC to a new point where it produces 30 unites of steel and 10 units of bread. Is the country better off?

“The increase in consumption of raw cotton has been rapid and steady for beyond all precedents in any other manufacturer” (Beckert, 86). The process of cotton has increased since the production had started and many places which could produce cotton, can no longer keep up with the demand that is being asked. The third main point is the expansion of cotton in other parts of the world, cotton was being grown everywhere. Brazil cotton first got to England in 1781 and surpassed Caribbean. “By the 1780s, slaves in the West Indies and South America . . . on world markets” (Beckert,94).

With the elimination of U.S. government subsidies, cotton textile manufacturers will pay more for cotton. As the leading buyer of cotton, the Chinese apparel industry’s profitability will be reduced due to their inability to pass on increased cotton prices to their buyers. China’s manufacturing costs had already increased by as much as 40% due to higher market wages and costs with complying with worker and environmental protections. Although China has substantial labor and is accused of utilizing sweat shops to keep their costs extremely low, their increasing manufacturing costs have opened the door to other countries with cheap labor such as Vietnam and Pakistan.

· What are the effects of international trade to GDP, domestic markets and university students?

In this I am going to assess the methods to increase trade between countries and the methods to restrict trade between countries. When asses the methods of encouraging and restricting trade I will talk about the purpose for the methods of promoting and restricting international trade, identify how and why they might be used and I will decide how useful each method is giving appropriate reasons for it. International trade is the exchange of goods and services between countries.

One problem that trade barriers have caused is that they increase the cost of enterprises, affecting the international competitiveness of enterprises. For a long time, due to the low technological content of Chinese export products, mainly to win international markets at low prices, the developed countries have adopted some ways, such as the green subsidy system, the green packaging system, the green fortress and so on. By imposing import surcharges, increasing the cost of

In modern economic policy of nations and states, the tariffs a tool to tax goods and services being imported. The principal desired outcome for this tool is to create security for the domestic industry from the imported product, which may be cheaper for consumers to purchase. (McEachern, 2015)

We can use Welfare Economics and Gains from Trade to conclusively state that we will be worse off as a country due to sugar tariffs (Landsburg, 2009). In more detail the import restriction of sugar at world prices assures that we will have a constriction of supply from the world market and unmet demand from domestic consumers (Landsburg, 2009). The cost to us will be the dead weight loss associated with the restriction of imports.

Governments intervene in international trade through use of tariffs that are levied on both imports and exports. The government may either impose fixed tariffs that are calculated per unit of the import commodity or the ad valorem tariff that is calculated as a fixed percentage of the monetary value of the imported commodity. The government imposes high import tariffs in order to control the rate of imports by making the imports more expensive in comparison to the domestically produced substitutes. The tariffs increase the prices of goods and services thus reducing the quantity demanded (Misra and Yadav 2009). The use of tariffs is detrimental to international trade since it lowers competition and results in high prices of commodities in the markets. The tariffs discourage imports and domestic producers benefit from the higher prices and reduction in competition. The EU uses variable

In an attempt to safeguard the economy from foreign competition, the government of a country can implement a tax or fee known as a tariff. A tariff is a simple means for governments to earn income. It is not the only way that a country can collect revenue on imports, there are other regulations, subsidies, and quotas that have an impact on trade between countries, but tariffs are the easiest to collect and have been in existence for hundreds of years. The amount of tariffs that are levied vary tremendously between countries and commodities from free trade in which there are no barriers in trade, up to protectionism where the government tries to protect its economy from foreign competition. The tariff can be implemented by a specific tariff amount that is charged for each single item that is imported, or as a percentage of the value of the item known as a valorem tariff or both can be implemented simultaneously. A Harmonized Tariff Schedule is used in the United States that lays out the tariff that is to be collected on each good or service that is imported. (Suranovic, 2012, pp 11-12)

This paper will explain the price transmission between world cotton prices to the domestic prices in the West African ‘Cotton Four’ (‘C4’) countries of Benin, Mali, Burkina Faso and Chad. It will analyse the short- and long-term effects on domestic farmers’ income, the implications for domestic production of cotton and other relevant crops in these countries, and then look at the effects on the labour markets of these nations.

quotas and regulations to restrict foreign trades and to discourage importation of certain goods into the country in order to protect and promote domestic markets. Protectionism is often seen as a hindrance to free trade because it isolates and hinders some foreign industries which are willing to compete against domestic industries (Shah, 2010).

International trade is to explain why countries to import and export cargo, and barriers to trade and many different steps and trade barriers have been taken down and explain some economic factors must be protected trade.