Question

Possible arguments more trade restrictions:

The American car manufacturers’ group favors some type of import restriction (barrier to trade) – a tariff, quota, or subsidy that will lower their costs of production. Any of these measures will allow them to compete more successfully with lower-cost foreign producers, such as Brazil.

Any import restriction will raise the incomes of the car manufacturers.

Import restrictions or subsidies allow car manufacturers to hire more workers and not lay off existing workers.

Possible arguments for fewer trade restrictions:

The group representing computer manufacturers favor free trade because this will allow its members to continue producing large numbers of computers for both American consumers and Brazilian consumers.

With free trade, American consumers can get both computers and cars cheaper.

The car workers who are laid off will find more productive job opportunities in the computer industry.

Attempts to subsidize car production in America will lower the price of cars, but not the cost of producing them in terms of foregone computer production. Also, the subsidies will have to be paid for through higher taxes.

Answer these questions:

If a country imposes a barrier (such as tariffs) against imports what is likely to happen to the price and amount of imported goods?

Is anyone made worse off as a result of tariffs on imports?

Answer 1

When a country imposes barriers such as tariffs against imports, the price of imported goods increases and the quantity of imported goods decreases. Tariffs primarily affect the country's consumers, reducing their purchasing power and access to goods at lower prices.

Step-by-step explanation:

When a country imposes barriers such as tariffs against imports, the price of imported goods is likely to increase, and the amount of imported goods is likely to decrease. Tariffs are taxes imposed on imported goods, which makes them more expensive for consumers to purchase. This leads to a decrease in the quantity demanded of these goods.

As for who is made worse off as a result of tariffs on imports, it primarily affects the country's consumers. The increased prices of imported goods reduce their purchasing power and their ability to access a wider variety of goods at lower prices. On the other hand, domestic producers may benefit from the protection provided by tariffs as they face less competition from cheaper foreign goods. However, overall, the negative impact on consumers tends to outweigh the benefits to producers.