115b_section3

115b_section3 - Section 3 Effective Rate of Protection...

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Section 3 Effective Rate of Protection Homework 1 review and Guns Germs and Steel 8/15/2009
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Announcements Midterm 1 Thursday October 22 nd Sections canceled Thursday October 22nd Replaced by review sections Wednesday October 21 st 6-8pm, Wellman 202 Bring questions, I will only prepare a few examples
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Go over Homework 1 Homework 1 Answer Key
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Effective rate of protection Effective rate of protection- measures how protected domestic markets are from foreign competition Higher effective rate of protection comes from higher prices of outputs (final goods) and lower prices of inputs Import Substitution Industrialization policies should try to increase ERP to encourage infant industries
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Steel and Car industry Banana Republic is trying to develop a car and a steel industry Originally all steel and cars imported Each car takes 5 tons of steel to make Each ton of steel costs $10,000 Each car costs $100,000 Labor costs $50,000 to make the car (These are world prices)
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Protection Government slaps tariffs on steel of 100% (effective
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This note was uploaded on 11/07/2009 for the course ECON 115B taught by Professor Carlmosk during the Fall '09 term at UC Davis.

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115b_section3 - Section 3 Effective Rate of Protection...

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