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Chapter 20: Q. 47 (page 491)

Why might the unsafe consumer products argument be a more effective strategy (from the perspective of the importing country) than using tariffs or quotas to restrict imports?

Short Answer

Expert verified

The unsafe consumer products argument completely blocks out the import of goods are considered not safe while other restrictions reduce the quantity supplied but do not completely eliminate it.

Step by step solution

01

Step 1. Meaning of unsafe consumer products.

Unsafe consumer products are those goods that are hazardous for the environment and stopping their production is safe for the environment.

02

Step 2. The best strategy for unsafe consumer products.

The unsafe consumer products argument completely blocks out the import of goods are considered not safe while other restrictions reduce the quantity supplied but do not completely eliminate it. So, this argument is a better tool to protect consumers.

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Most popular questions from this chapter

The country of Pepper land exports steel to the Land of Submarines. Information for the quantity demanded (Qd) and quantity supplied (Qs) in each country, in a world without trade, are given in Table.

Price\(Qd
Qs
60230180
70200200
80170220
90150240
100140250

Table 20.6 Pepper land

Price\)Qd
Qs
60430
310
70420330
80410360
90400400
100390440

Table 20.7 Land of Submarines

a. What would be the equilibrium price and quantity in each country in a world without trade? How can you tell?

b. What would be the equilibrium price and quantity in each country if trade is allowed to occur? How can you tell?

c. Sketch two supply and demand diagrams, one for each country, in the situation before trade.

d. On those diagrams, show the equilibrium price and the levels of exports and imports in the world after trade.

e. If the Land of Submarines imposes an antidumping import quota of 30, explain in general terms whether it will benefit or injure consumers and producers in each country.

f. Does your general answer change if the Land of Submarines imposes an import quota of 70?

If opening up to free trade would benefit a nation, then why do nations not just eliminate their trade barriers, and not bother with international trade negotiations?

Who does protectionism protect? From what does it protect them?

Explain how a tariff reduction causes an increase in the equilibrium quantity of imports and a decrease in the equilibrium price. Hint: Consider the Work It Out "Effects of Trade Barriers."

Microeconomic theory argues that it is economically rationale (and profitable) to sell additional output as long as the price covers the variable costs of production. How is this relevant to the determination of whether dumping has occurred?
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