Critical Thinking Questions
How would direct subsidies to key industries be preferable to tariffs or quotas?
How can governments identify good candidates for infant industry protection? Can you suggest some key characteristics of good candidates? Why are industries like computers not good candidates for infant industry protection?
Microeconomic theory argues that it is economically rationale (and profitable) to sell additional output as long as the price covers the variable costs of production. How is this relevant to the determination of whether dumping has occurred?
How do you think Americans would feel if other countries began to urge the United States to increase environmental standards?
Is it legitimate to impose higher safety standards on imported goods that exist in the foreign country where the goods were produced?
Why might the unsafe consumer products argument be a more effective strategy (from the perspective of the importing country) than using tariffs or quotas to restrict imports?
Why might a tax on domestic consumption of resources critical for national security be a more efficient approach than barriers to imports?