their incomes in the import-competing industries•Effects of Import Quota: prices rises quantity bought decreases quantity produced in U.S. increases•U.S. consumers of good lose•U.S. producers of good gain•Importers of good gain•Society loses: a deadweight loss arises•Conclusion:A tariff brings in revenue for the government while a quota brings a profit for the importers.What are other import barriers?•Health, safety, and regulation barriers (restrict international trade)•Voluntary export restraints (like a quota allocated to a foreign exporter of a good)•A subsidyis a payment by the government to a producer•An export subsidyis a payment by the government to the producer of an exported good (illegal)•Rich nations want greater access to the markets of developing nations in exchange for allowing those nations greater access to the rich world’s markets•Developing nations want access to the farm product markets of the rich world, but they also want to protect their infant industries•Conclusion:Export subsidies bring gains to domestic producers, but they result in inefficient underproduction in the rest of the world and create a deadweight loss.
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