Explain why an export subsidy is more costly

Assignment Help Microeconomics

Reference no: EM132177285

Question: 1. Why might a large country like the United States have a greater incentive than a small country to use trade restrictions?

2. Using a general equilibrium approach, point out the real income loss from a tariff to a country. What is the consumer welfare loss? Why might consumers prefer a production subsidy rather than a tariff?

3. Explain why an export subsidy is more costly in the case of a large country than in the case of a small country, other things being equal.

Reference no: EM132177285

Questions Cloud

What is the net effect on society : Suppose that the free-trade price of a good is $12 and a 10 percent ad valorem tariff is put in place. As a result, domestic production in a small country.

Level of inflation vs the stability of the inflation rate : Consider the issue of the level of inflation vs. the stability of the inflation rate. Which would be more harmful to the economy:

Do you think people in health care are still skeptical about : Do you think people in health care are still skeptical about quality improvement? Why or why not?

Which instrument are domestic consumers likely to prefer : What is the difference between an export tax and an export subsidy? Which instrument are domestic consumers likely to prefer? Why?

Explain why an export subsidy is more costly : Explain why an export subsidy is more costly in the case of a large country than in the case of a small country, other things being equal.

Why is the instability in this variable costly : For each of these variables, describe: (a) Why is the instability in this variable costly? and (b) Who bears the cost?

Estimate welfare impacts that would occur with such a tarrif : Suppose that a (small) country is an importer of good X, for which the current world price is $8. At that price with free trade, home producers are supplying.

What are some benefits of using open-ended questions : What are some benefits of using open-ended questions? Provide examples of open-ended questions you might use with clients.

Implementation of a transnational strategy : What are the main organizational problems that are likely to be associated with implementation of a transnational strategy?

User Account

All Pages