Professional Documents
Culture Documents
Jeffrey Timmermans
What do these countries have in
common?
✤ China ✤ India
✤ Morocco ✤ Turkey
✤ Colombia ✤ Cambodia
✤ Lesotho ✤ Mexico
And the answer is....
Exports
Imports
Price after
Trade
Price before
Trade
{
Consumer
Surplus
World
price
Domestic
Demand
Quantity of
Textiles
Effects of trade on an importing
country
Domestic
Price of Supply
Textiles
Consumer
Surplus
Consumer Surplus
Price before
Trade
World
Price after
Trade
{ Imports
price
Domestic
Demand
Quantity of
Textiles
Free trade: winners
✤ Increased competition
✤ Eliminates jobs
✤ Trade barriers
✤ Trade subsidies
✤ Tariffs
✤ Licenses
✤ Quotas
✤ Subsidies
✤ Content requirements
✤ Embargo
Effects of a tariff
Domestic
Price of Supply
Textiles
Consumer Surplus
Consumer Surplus
Price without
Trade
Price after
Tariff
{ Tariff
World price
}
Producer
Imports
Surplus Domestic
Imports Demand
Producer
Quantity of
Surplus Textiles
Trade subsidies
✤ “Quality” requirements
✤ Health concerns
✤ Packaging
✤ Labeling
✤ Dense bureaucracy
Trade terminology
✤ Current Account
✤ World Bank