microchapter9 - RikkiNorton Microeconomics Chapter9...

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Rikki Norton Microeconomics Chapter9 Questions for Review (1, 2, 4, 5, 6) 1. The unilateral approach removes its trade restrictions on its own and the multilateral  approach gradually reduces its trade restrictions while other countries do the same. An example  of a unilateral approach is when Great Britain opened up for trade in the 19 th  century. An  example of a multilateral approach is the North American Free Trade Agreement. 2. Before trade is allowed consumer surplus will be less then producer surplus. After trade  consumer surplus will be more then producer surplus. Total surplus will increase after trade is  enacted.  4. A country becomes an exported of a good when they have a comparative advantage and can  produce the good at a price lower than the world price. A country becomes an importer of a  good when the rest of the world has a comparative advantage and can produce a good at a  lower price than they can produce it domestically.  5. A tariff is a tax on imported goods, goods that are produced abroad and sold domestically. 
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