What Is Free Trade?
Free trade is a direction, not a switch: countries sit anywhere between few barriers and many.
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1.What is a tariff, and what is a quota?
Free trade is a direction, not a switch: countries sit anywhere between few barriers and many.
2.In Ricardo's example, Portugal is better at both goods. Why can trade still help it?
England gives up less wine per cloth, and Portugal gives up less cloth per wine.
3.What is the name for the lower give-up?
Each country does the job where it gives up less.
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Sources (7)
- Ricardo, D.: On the Principles of Political Economy and Taxation, Kap. VII "On Foreign Trade" (1. Aufl. 1817; Text
- WTO: Understanding the WTO - principles of the trading system
- Autor, D., Dorn, D., Hanson, G.: The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade, NBER Working Paper 21906 (January 2016); Annual Review of Economics 8 (2016), S. 205-240
- Hamilton, A.: Report on the Subject of Manufactures (5. December 1791), Volltext constitution.org
- Greenlaw, S., Shapiro, D., MacDonald, D.: Principles of Economics 3e, OpenStax 2022, Kap. 34.5 "The Tradeoffs of Trade Policy"
- Eigene Rechnung: Ricardo-Beispiel
- Eigene Rechnung: Rueckruf Zoll 10 Prozent auf Importpreis 100 (Uebungsaufgabe)
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