Microeconomics,, 16th Canadian Edition

Invalid Arguments for Protection We have seen that free trade is generally beneficial for a country overall even though it does ...

to whom it could sell the dollars) wanted them to spend in the only country where they are legal tender—Canada. Canadian currenc ...

gardening, cooking and cleaning? No one believes that a rich person gains nothing by trading with those who are less rich. Why, ...

Exports raise GDP by adding to the value of domestic output and income, but they do not add to the value of domestic consumption ...

electronics, and Polish sausages. Surely, the argument goes, these polices will create more employment in Canadian industries pr ...

and aluminum more cheaply in other countries and then sell their finished products into the United States at low prices. After t ...

United States appeared to be willing to engage in a “tariff war,” ignoring important lessons from history. What are those lesson ...

Economists today agree that the widespread increase in tariffs in the 1930s contributed significantly to a reduction in global t ...

Canadian government went to great lengths to argue that U.S. trade protection would not only hurt Canada but would also hurt the ...

deal in a world with high protection and less trade. As this book went to press in the fall of 2018, there remained considerable ...

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1 They can also get dollars by selling to other countries and then using their currencies to buy Canadian dollars. But this inte ...

Figure 33-1 The Deadweight Loss of a Tariff 33.2 Methods of Protection We now go on to explore the effects of two specific prote ...

A tariff imposes a deadweight loss for the importing country. Before the tariff, the price in the domestic economy is the world ...

consume less of the product because its price rises, and second, they pay a higher price for the amount they do consume. This ex ...

Net loss in surplus = ② + ④ The overall effect of the tariff is therefore to create a deadweight loss to the domestic economy eq ...

Figure 33-2 The Deadweight Loss of an Import Quota Import Quotas The second type of protectionist policy directly restricts the ...

An import quota drives up the domestic price and imposes a deadweight loss on the importing country. With free trade, the domest ...

Tariffs Versus Quotas: An Application The dispute that has raged for many years between Canada and the United States over the ex ...

the tariff, the restricted supply of Canadian lumber to the U.S. market drives up the price to U.S. users and also raises profit ...