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1、Ch9SOTIONS TO TEXT PROLEMS:QuickQuizzes1ince woolss arehaper nnegoringcountries, Autarka l imporsuitsf it wre to alowre trade.gur-1 hows thuplyn eand for ol uit in tarka. Wthno tade, th pe of su is 3unces f ld, consumr surlus is area A, procersuplusis a + C,andttal surplu is reaA + B C Wn trdei allw
2、d，the ce flls to 2nces of gl, onumer ulus ise to A+ D (an increas of B + D),produer rpusfalst （ecline f B), so otal surplusrss oA B + C+D (n incease of D) Atari onsuit impot would reduceteinceae in cosumer srplus， duce the decline npodesurpls, and rce theginin total surplus.Figue 9-1Lobbts fr thexti
3、le ndustry mig a fve arumnt in favr of a an the import of wolits: () import ofool suit desroy domstc jos;(2)te woo-ui idstryis vitlforntionalecurity； (3) th wl-sut indusry i ut tatingandeeds rtecionromforeigncompett til itgts start; (4) ter contrisar unfairl suidizing their ol-suit nduses; ad （) the
4、ban on wol suis c b ed a bargainingchp intrnationalneoations In fnng free rade inwool suit,you ouldargethat: （)reerade craesjos n someinutisen ast destroys job in thwoolsuit ntry,an lows utara to eno a hiher stard of liing; (2) te le of wolsitsfor he miay iprbaby exaggerated; (3) ovenmet protctionin
5、neededfor anindustr togrw n it own; (4) t wold be od frAutar touy w sus t sbsdized rice; and （) hreas anst freetrade ma bkfire, leadng toloer trade d ower conic welfaefr everone.Qestions for Rvw1.f te domesti rice that prevals wihout intaionl trae s abovethe wl prce, the country dos not a omaraiv ad
6、vante i produ thegood te domesti prce is belwtrld pric, th untry as a copaatie adatae inprodung he goo. 2f a countryhas a comparativdvnten producing a good, it wll ecomean eporter wen trades allowe. I couny do ot have cmprive adanageinodcing a god, it wi bece nimporerwhen trde is alwd. 3.gu92 illust
7、tes supply and den or n imptincuntry.Bforetade sllwed, consumer urls s ar and produer supus is area C. Aftertraei alw， consme splus isaeaA B + D an prodersulu is raC. Tchae in total urlus is n cse barea DFgure 94A trff i atax ongos oduced aradd sld domestically. Tifheo efetsf acontry s an exort of a
8、 ood. f a cour is n imrer of a good, tariffredcethe uity imports an moves he domesti aret loseto it equilium wto trade, ncreasing the ri egod, rcin osmer uplus andtotl urplus, hle raing producer suruan govenmen evenue.An imprt uotaisa liit onth qunttoa od hat can be roduced abroad an sod doesicay It
9、s econoc efets ae imilr t hos f tar, in ht n impor qua euces the qantty of mport nd moves the oestc mrkt loeto its eqilibrm withou trad, incasin the peo h god, reducing consur urplusnd total surplus, while aisingprdcr upus. However, atarif rases revnefo the govrnmen while n impot uota ceates uplufol
10、ensehldes.6h argumentsgent spot rde restrictions are: (1) rae etr job; （） indries thratndih cmpetiion mye vtal for atinl secuity; () ne ndusis ed tade estrctions help them e strted;(4）sme outri nfarly sbiize tir frms,s coetiion is far; an （5) tr resticos ae fu barginingchi. Ecnomiss diagre wih these
11、 rguments: (1) trde may dstoysom jobs, butitcaesthr jos;()argmnts outntio curiy nd to beexaggeated； （) t ernment cat aily dntfy ew dusristat are rthproecin; （4) if ountries sbidiztheirxport，ding s simplbnefits consumrs; ad (5) brgiig over tade is risksins， si it y bakfire，making he cunty wrseff ioua
12、eA unilateal roach t chievngfee tra oshen ountryremoe tradeestctions on tsow. Under aultilateralappoac, a countryreucsits rade etictions wile ohe trie do he ,ase on ngreetreachdtougagaining. The unlatera aroac takenby Grt Britai in te10s n y Cie andouth Krea in rect year. Example ofthe mliltralapproach includ NAFTA n 193 an th GTT ngtatos sic Wr War I.roblms and Applica
