LECTURE 9.29 TARIFFS AND QUOTAS

LECTURE 9.29 TARIFFS AND QUOTAS - Lecture 6 Tariffs and...

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Lecture 6: Tariffs and Quotas 9/29/11 Consumerism o Social movement to augment the rights and power of the consumer vis-à-vis the seller Materialism o Exclusive preoccupation with material goods Insatiability for wants Tariffs & Quotas o Tariffs – tax on products coming into the US o Quotas – limitation on how many of the product can be sold Value of International Trade o Absolute Advantage Occurs when country has monopolistic position or produces an item at the lowest cost o Comparative Advantage Occurs when country can supply an item more efficiently and at lower cost than it can supply other products o Economies to Scale Cost per unit decreases as the quantity of production increases o Tariff – amount charged by government on goods and services that are imported or (less frequently) exported o Tariff revenue – amount of money collected by government that imposes tariff o Quota
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