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1. Who are the winners and who are the losers from free trade? 2. Why do economists believe that a a tariff is better than

1. Who are the winners and who are the losers from "free trade"?

2. Why do economists believe that a a tariff is better than an import quota? (Actually most economists do not like either!)

3. How does international trade affect working conditions of low-income countries?

4. What is one argument for and one argument against NAFTA?

5. Evaluate this statement: "If a country bans an import, smuggling is inevitable. We should welcome smuggling becuse it increases consumer welfare."

6. Suppose Country A can produce 200 toys or 400 pineapples per day, while Country B can produce 300 toys or 900 pineapples per day. Where do the comparative advantatges lie? Should trade take place?

7. What is dumping? Why is this done?

8. Discuss this statement: "Free traders win the economic arguments, but protectionists (those whofavor tariffs) oftenwin the elections."

9. Do you believe that American consumers should boycott goods made by exploited workers in Less Developed Countries? Explain why this might or might not work.

10. How can there be any economic gains for a country from both importing and exporting the same good,like cars?

11. American firms outsource many jobs to other, lower cost countries. How can this outsourcing actually lead to increased employment here in the USA?

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