Question: Carefully explain how imposing an import tariff or export tax can alter the real returns to the factors of production in the country that is imposing that protection. Carefully explain he circumstances under which imposing an import tariff can increase the aggregate welfare of the imposing country.
This essay is theoretical rather than applied in nature and involves the extensive use of well explained diagrams. These diagrams can be hand drawn in the essay. Include them in the text, rather than in an appendix. It requires that the importance of the assumptions that underpin the various theoretical models be discussed. This essay should be referenced but does not require extensive reading beyond the text books mentioned above and the notes that you take in tutorials and lectures.