advisor to the government in Forestland. Explain which groups
gain and which groups lose from each of the following policies.
a. Houseland imposes a tariff on lumber imports from
Forestland.
b. Forestland imposes a tax on each unit of lumber exported
to Houseland.
c. Forestland agrees to restrict its exports of lumber to
Houseland.
d. Which policy is likely to garner the most political support
in Houseland? In Forestland?
9. The United States recently threatened to impose duties on
imported Canadian steel pipe. The allegation is that Canada is
dumping its pipe into the U.S. market.
a. Who would benefit from such alleged dumping? Who
would be harmed?
b. Who would benefit from the imposition of the
antidumping duties? Who would be harmed?
c. Would the United States as a whole be made better off by
the imposition of the duties? Explain.
10. In the past few years, trade between Canada and China has been
growing quickly (though from a very low level). Many observers
are concerned that Canadian firms are not able to compete with
Chinese ones and that Canada may therefore be harmed by
trading more with China. Comment on the following points in
relation to the above worries:
a. “Chinese are the most expensive cheap labour I have ever
encountered.” Statement by the owner of a Canadian firm
