Chapter 21: Q 49. (page 523)
Why do you think that the GATT rounds and,
more recently, WTO negotiations have become longer and more difficult to resolve?
Short Answer
This is because of the nature of both WTO and GATT.
Chapter 21: Q 49. (page 523)
Why do you think that the GATT rounds and,
more recently, WTO negotiations have become longer and more difficult to resolve?
This is because of the nature of both WTO and GATT.
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Get started for freeIn principle, the benefits of international trade to a
country exceed the costs, no matter whether the country is importing or exporting. In practice, it is not always possible to compensate the losers in a country, for example, workers who lose their jobs due to foreign imports. In your opinion, does that mean that trade should be inhibited to prevent losses?
The country of Pepperland exports steel to the Land of Submarines. Information for the quantity demanded (Qd) and quantity supplied (Qs) in each country, in a world without trade, are given in Table 21.6 and Table 21.7.
a. What would be the equilibrium price and quantity in each country in a world without trade? How can you tell?
b. What would be the equilibrium price and quantity in each country if trade is allowed to occur? How can you tell?
c. Sketch two supply and demand diagrams, one for each country, in the situation before trade.
d. On those diagrams, show the equilibrium price and the levels of exports and imports in the world after trade.
e. If the Land of Submarines imposes an antidumping import quota of 30, explain in general terms whether it will benefit or injure consumers and producers in each country.
f. Does your general answer change if the Land of Submarines imposes an import quota of 70?
What are the gains from competition?
An economic union requires giving up some
political autonomy to succeed. What are some examples of political power countries must give up to be members of an economic union?
How do trade barriers affect the average income level in an economy?
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