托福考试内容Chapter 9
The Instruments of Trade Policy
Chapter Organization
美国驻华大使馆爆炸
Basic Tariff Analysis
Supply, Demand, and Trade in a Single Industry
Effects of a Tariff
Measuring the Amount of Protection
Costs and Benefits of a Tariff
Consumer and Producer Surplus英语学习班
Measuring the Costs and Benefits
Box: Tariffs for the Long Haul
Other Instruments of Trade Policy
Export Subsidies: Theory
Ca Study: Europe’s Common Agricultural Policy
Import Quotas: Theory
Ca Study: An Import Quota in Practice: U.S. Sugar
Voluntary Export Restraints
Ca Study: A Voluntary Export Restraint in Practice
Local Content Requirements
Box: Bridging the Gap
Other Trade Policy Instruments
The Effects of Trade Policy: A Summary
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Summary
少儿英语教案APPENDIX TO CHAPTER 9: Tariffs and Import Quotas in the Prence of Monopoly The Model with Free Trade
The Model with a Tariff
The Model with an Import Quota
Comparing a Tariff and a Quota
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社交礼仪培训46 Krugman/Obstfeld/Melitz •International Economics: Theory & Policy, Tenth Edition
Chapter Overview
This chapter and the next three focus on international trade policy. Students will have heard in the media various arguments for and against restrictive trade practices. Some of the arguments are sound, and some are clearly not grounded in fact. This chapter provides a framework for analyzing t
he economic effects of trade policies by describing the tools of trade policy and analyzing their effects on consumers and producers in domestic and foreign countries. Ca studies discuss actual episodes of restrictive trade practices. An instructor might try to underscore the relevance of the issues by having students scan newspapers and magazines for other timely examples of protectionism at work.
托业培训The analysis prented here takes a partial equilibrium view, focusing on demand and supply in one market, rather than the general equilibrium approach followed in previous chapters. Import demand and export supply curves are derived from domestic and foreign demand and supply curves. There are a number of trade policy instruments analyzed in this chapter using the tools. Some of the important instruments
of trade policy include specific tariffs, defined as taxes levied as a fixed charge for each unit of a good imported; ad valorem tariffs, levied as a fraction of the value of the imported good; export subsidies, which are payments given to a firm or industry that ships a good abroad; import quotas, which are direct restrictions on the quantity of some good that may be imported; voluntary export restraints, which are quotas on trading that are impod by the exporting country instead of the importing country; and local content requirements, which are regulations that require that some speci
fied fraction of a good is produced domestically.
The import supply and export demand analysis assumes a large country tariff, in which the imposition of a tariff drives a wedge between prices in domestic and foreign markets, and increas prices in the country imposing the tariff and lowers the price in the other country by less than the amount of the tariff. This contrasts with most textbook prentations, which make the small country assumption that the domestic internal price equals the world price plus the tariff. The chapter also discuss how the actual protection provided by a tariff may not equal the tariff rate if imported intermediate goods are ud in the production of the protected good. The proper measurement, the effective rate of protection, is described in the text and calculated for a sample problem.
The analysis of the costs and benefits of trade restrictions require tools of welfare analysis. The text explains the esntial tools of consumer and producer surplus. Consumer surplus on each unit sold is defined as the difference between the actual price and the amount that consumers would have been willing to pay for the product. Geometrically, consumer surplus is equal to the area under the demand curve and above the price of the good. Producer surplus is the difference between the minimum amount for which a producer is willing to ll his product and the price that he actually receives. Geometrically, producer surplus is equal to the area above the supply curve and below the
price line. The tools are fundamental to the student’s understanding of the implications of trade policies and should be developed carefully.
The costs of a tariff include distortionary efficiency loss in both consumption and production. A tariff provides gains from terms of trade improvement when and if it lowers the foreign export price. Summing the areas in a diagram of internal demand and supply provides a method for analyzing the net loss or gain from a tariff. The gain from a tariff is larger the greater is the decrea in foreign export price from the tariff (as the tariff-imposing country is able to pass some of the costs of the tariff on to foreign exporters). Becau large countries will have a larger influence on export prices than small countries, a large country is more likely to gain and, therefore, impo an import tariff.
Other instruments of trade policy can be analyzed with this method. An export subsidy operates in exactly the rever fashion of an import tariff. For example, Europe’s common agricultural policy has raid the price European farmers receive so much that Europe ends up exporting agricultural goods despite very high labor and land costs. The net cost of this shift to consumers is about $30 billion a year.
An import quota has similar effects as an import tariff upon prices and quantities, but revenues, in th
e form of quota rents, accrue to the quota licen holders, who are often foreign producers. For example, a quota on sugar imported into the United States has greatly incread the fortunes of foreign sugar producers (many of which are owned by American sugar refiners), at a significant cost to American consumers. Estimates place the cost of each job in the American sugar industry “saved” by protection at $1.75 million. Voluntary export restraints are a form of quotas in which import licens are held by foreign governments. For example, Japan voluntarily limited exports of cars to the United States to forestall any import tariffs on cars from Japan in the wake of the oil price spike of 1979. The net result of the VER’s was to rai the price of Japane cars, with the gains accruing directly to Japane manufacturers. A similar story is happening now with voluntary export restraints on solar panels exported from China to the European Union.
Another trade instrument is to mandate local content requirements. The rai the price of imports as well as domestic goods competing with imports but do not yield either tariff revenue or quota rents. The recent construction of the new Bay Bridge linking San Francisco and Oakland is ud as a ca study. Federal funding was available for this project but would have required the state of California to u a much more costly American contractor as oppod to the significantly cheaper Chine bid. In the end, the bridge was built through local bonds rather than federal funding becau of the local content requirement of federal funding.
The Appendix discuss tariffs and import quotas in the prence of a domestic monopoly. Free trade eliminates the monopoly power of a domestic producer, and the monopolist mimics the actions of a firm in a perfectly competitive market, tting output such that marginal cost equals world price. A tariff rais domestic price. The monopolist, still facing a perfectly elastic demand curve, ts output such that marginal cost equals internal price. A monopolist faces a downward-sloping demand curve under a quota. A quota is not equivalent to a tariff in this ca. Domestic production is lower and internal price higher when a particular level of imports is obtained through the imposition of a quota rather than a tariff.
Answers to Textbook Problems
1. The import demand equation, MD, is found by subtracting the Home supply equation from the Home
demand equation. This results in MD= 80 - 40 ⨯P. Without trade, domestic prices and quantities adjust such that import demand is 0. Thus, the price in the abnce of trade is 2.
英国国际学校2. a. Foreign’s export supply curve, XS, is XS=-40 + 40⨯P. In the abnce of trade, the price is 1.
b. When trade occurs, export supply is equal to import demand, XS=MD. Thus, using the equations
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from Problems 1 and 2a, P= 1.50, and the volume of trade is 20.
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