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When trade begins, Country Z imports cloth, the labor-intensive commodity. What does this imply about Z's own factor endowment?
Once a free-trade equilibrium is reached, if Brazil imposes a tariff on imports, what will be the effect on its ratio of wages to return on capital?
What role do factor intensities of production play in the factor proportions theory of trade? How could that affect the predicted pattern of trade?
What does the factor proportions theory imply about the composition of a nation's exports and imports? Why?
Given your understanding of the different effects of tariffs and quotas. Who gains and who loses from the imposition of an export tax?
What are likely to be the employment effects of this action? Discuss, considering as many aspects of this issue as you can.
Volatile prices of primary export products result in unstable export earnings for many LDCs. How will earnings be affected by price stabilization pacts?
Are there groups in the home country that nevertheless would be adversely affected? What happens to domestic employment and wages?
What type of immigration should it encourage? Why might some developing countries feel that they would be harmed by this Canadian immigration policy?
What groups in Europe benefit from the rising immigration of Africans and Asians? What groups are harmed?
What countries would you expect to support the US position on intellectual property within the WTO? Why?
Why did the Uruguay Round almost fail in late 1990? Why was the United States so forceful on the subject of EU agricultural subsidies?
What is the most-favored-nation clause? How exactly does it work, and why is it used in tariff agreements? How is it related to the concept of reciprocity?
How is the objective of nondiscrimination achieved in GATT tariff agreements? What are the two major exceptions that have been formally agreed on by GATT?
Why is the proposed entry of Chile likely to be far less controversial? What if Brazilian membership were proposed?
What happens to the trade creation and diversion effects of the EEC as more members, such as Poland and Hungary, are added?
How can both trade creation and trade diversion effects occur in the same product market when a regional bloc is created?
Why do we not observe a political action committee representing consumers of cars? Where do you expect the highest trade barriers to be imposed?
How does the imposition of anti-dumping duties affect producers in the importing country? Why may your answer depend upon their market share?
Why can external economies from an industry's growth justify support for protection? Is this an argument for permanent or temporary protection?
Russian wages are so low that European producers will require additional protection to maintain current wages. Evaluate the economic basis for this statement.
Under what circumstances is the terms-of-trade argument for a tariff valid for a single nation? Does the world as a whole gain? Why or why not?
Why will eliminating a tariff on clothing have a different effect on income distribution from eliminating a tariff on computers?
What profit will each make in this new situation? Is the combined profit here greater or less than in the cartel situation?
Draw the demand curve to scale on a diagram, and then insert the corresponding marginal revenue curve and the MC curve.