Using a real-world example, provide a limitation against national security as a reason to justify trade protection
The US was close to banning TikTok from operating in the US due to "national security" concerns over how China might utilize TikTok's data
Trade protection always causes a misallocation of resources. Illustrate this through the use of a export subsidy.
Areas c & e with world price above equilibrium price
Outline FOUR reasons why trade protection could be justified
protecting infant industries, national security, ensuring environmental standards, raising government revenue
One of the reasons for trade protection is to raise government revenues. Using any trade protection diagram, highlight the area of government revenues as a result from trade protection.
Tariff diagram only (all other diagrams either don't show gov't revenue or leads to an expense for governments)
What is the main argument of the mercantilism trade theory?
Mercantilists argued that a country must maximize production and reduce their reliance on imports in order to grow richer.
Draw out a diagram to illustrate why free trade is beneficial to an economy.