1) This question has two parts: a) Graphically illustrate the welfare effects of a tariff in the case of a small nation. Why do economists insist that the production distortion effect is a deadweight loss? b) It is sometimes argued that a tariff is welfare enhancing for a large nation. On what might such an argument be based.
2) Provide summarized but full discussion of the case in favor of restricting trade.
3) Using a simple model, present the benefits of trade negotiations for countries in today's global economy.