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INTRODUCING TRANSPORT COST

INTRODUCING TRANSPORT COST. EXCESS SUPPLY AND DEMAND CURVE. PRICE. A. ES. C. Price in Importing Country. B. P I. P E. D. E. Price in Exporting Country. t. ED. ED !. Q T. QUANTITY. EXCESS SUPPLY AND DEMAND CURVE. PRICE. A. ES. C. B. P I. P E. D. E. t. ED. ED !. Q T.

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INTRODUCING TRANSPORT COST

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  1. INTRODUCING TRANSPORT COST

  2. EXCESS SUPPLY AND DEMAND CURVE PRICE A ES C Price in Importing Country B PI PE D E Price in Exporting Country t ED ED! QT QUANTITY

  3. EXCESS SUPPLY AND DEMAND CURVE PRICE A ES C B PI PE D E t ED ED! QT Q N QUANTITY

  4. TRADE POLICIES OF IMPORTING NATIONS

  5. IMPORT TARIFFPOSSIBLY A FIXED AMOUNT PER UNIT(SPECIFIC TARIFF)OR A FIXED PERCENTAGE(AD VALOREM TARIFF)

  6. IMPORT QUOTARESTRICTS THE QUANTITY OF PRODUCT THAT CAN ENTER THE COUNTRY

  7. SOME TIMES QUOTAS ARE FIXED ON A COUNTRY BASISONLY SO MUCH FROM COUNTRY X

  8. TARIFF-RATE QUOTACOMBINATION OF A QUOTA AND A TARIFF

  9. TARIFF-RATE QUOTAA FIXED QUANTITY CAN BE IMPORTED AT A PREFERENTIAL TARIFF (ZERO) IMPORTS OVER THE QUOTA ARE TAXED

  10. REASONS FOR TRADE BARRIERS

  11. HOW TRADE IS RESTRICTED -- HEALTH REGULATIONS

  12. PROTECT A NEW INDUSTRY • WE MUST PROTECT AN INEFFICIENT "INFANT INDUSTRY" NOW BUT IT WILL EVENTUALLY BECOME EFFICIENT

  13. REASONS FOR PROTECTION • NATIONAL SECURITY • WE NEED TO PROTECT OUR STEEL INDUSTRY BECAUSE IT MAY BE VITAL FOR OUR NATIONAL DEFENSE

  14. REASONS FOR PROTECTION • PROTECT THE NATIONAL HEALTH • WE CAN NOT LET AMERICAN APPLES IN BECAUSE THEY HAVE BEEN CONTAMINATED BY PESTICIDES

  15. REASONS FOR PROTECTION • PROTECT AGAINST UNFAIR TRADE POLICY • COUNTRIES ARE "DUMPING" THEIR PRODUCT INTO OUR MARKETS TO FORCE OUR PRODUCERS OUT OF BUSINESS.

  16. REASONS FOR PROTECTION • PROTECT DOMESTIC PROGRAMS • SOMETIMES A GOVERNMENT WILL SUPPORT DOMESTIC PRODUCERS AT ARTIFICIALLY HIGH PRICES. IMPORT RESTRICTIONS MUST BE IN PLACE SO OUTSIDERS CAN NOT TAKE ADVANTAGE OF THOSE HIGH PRICES.

  17. REASONS FOR PROTECTION PROTECT BALANCE OF PAYMENTS WHEN A NATION'S PAYMENTS TO FOREIGNERS EXCEEDS ITS EARNINGS FOR THEM, IT HAS A PROBLEM. THIS CAN RESULT IN A CURRENCY DEVALUATION. REDUCE IMPORTS -- REDUCE THE IMBALANCE OF PAYMENTS

  18. REASONS FOR PROTECTION PROVIDE REVENUE

  19. REASONS FOR PROTECTION PROTECT AGAINST PAINFUL ECONOMIC ADJUSTMENT

  20. PRICE S Pd = Pw D Qp Qc QUANTITY

  21. PRICE S B A C Pd = Pw + t H F Pw G D E D Qc Qp Qp! Qc! QUANTITY

  22. PRICE CONSUMERS LOSE S B A C Pd = Pw + t H F Pw G D E D Qc Qp Qp! Qc! QUANTITY

  23. PRODUCER SURPLUS INCREASES PRICE S B A C Pd = Pw + t H F Pw G D E D Qc Qp Qp! Qc! QUANTITY

  24. PRICE GOVERNMENT INCOME S B A C Pd = Pw + t H F Pw G D E D Qc Qp Qp! Qc! QUANTITY

  25. PRICE PRODUCTION LOSS S B A C Pd = Pw + t H F Pw G D E D Qc Qp Qp! Qc! QUANTITY

  26. CONSUMPTION LOSS PRICE S B A C Pd = Pw + t H F Pw G D E D Qc Qp Qp! Qc! QUANTITY

  27. IMPORT QUOTASFORCING A SCARCITY

  28. PRICE S Se Pd Pw D QUOTA QUANTITY Q1 Q2 Q3

  29. PRICE ECONOMIC RENT TO THE QUOTA LICENSE HOLDER S Se Pd Pw D QUOTA QUANTITY Q1 Q2 Q3

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