Final Econ Notes.

Final Econ Notes. - Final Econ Notes. World Trade: o If the...

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Final Econ Notes. World Trade: o If the world price is higher than the domestic price, the domestic price shifts up and country x would export the goods. This suggests that country x has a comparative advantage in this good. o If the world price is lower than the domestic price, then the domestic price shifts down and country x would import the goods. This says that country x does not have a comparative advantage in this good. Exports: o When country x exports goods, domestic producers are now better off because they can sell for more. Domestic consumers are worse off. Imports: o When country x imports goods, domestic producers are worse off because they have to sell for less. Domestic consumers are better off. Tariffs: o A tariff reduces the quantity of imports and moves the domestic market closer to its equilibrium without trade. o Because the tariff raises the price of incoming goods, domestic sellers are better off, domestic buyers are worse off, and the government is better off (it gains revenue). o
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This note was uploaded on 04/24/2009 for the course ECON 2105h taught by Professor Staff during the Spring '08 term at UGA.

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Final Econ Notes. - Final Econ Notes. World Trade: o If the...

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