CPA 9 & 10

1. When it comes to opening up trade with other countries, how do we know what

goods should be imported and what goods should be exported? Does the government

have to make these decisions?

it mostly influenced by the market than the government, the government role is to

premit, regulations, and trade agreements.

the goods that should be imported depend on the buyer and seller

2. What do tariffs do to total surplus? Who is generally in favor of tariffs?

It would reduce consumer surplus, increases producer surplus, and redistribute

surplus.

Domestic industries, Infant Industries, and National security.

Podcast episode: Planet Money (Worst. Tariffs. Ever. https://www.npr.org/transcripts/598333995)

1. If trade is considered (by economists) to be good for the total welfare of a country,

why is it such a contentious political issue? What are some of the reasons why some

politicians run on a platform of restricting trade?

trade war can happen whenever they don't expect it,

it can have a loser and winner, job displacement, and unfairness for others.

2. Which sector of the economy generally desires protection from international

competition in the US today? How did that change since the 1930s?

Manufacturing, because of being forgotten by the economy and that technologies

has improved and been making work easier for others but not for the farmers.

3. What was the intended consequence of the Smoot-Hawley tariff? What were the

unintended consequences that economists predicted?

it was meant to protect American industries and farmers.

it unintended consequences is Global Trade retaliation, reduce global economic, and decreased effciency

and cost.

Ch 10

1. How can the government correct markets that have externalities?

They can make taxes, they can add regulations and limitations, public awareness,

creating a cap limit in trading, and establishing agreement.

2. What is the problem associated with public goods? How can we solve it?

The free rider problem, it can lead to people from preventing enjoying a good, and no one to pay

for it because they can consume without paying which lead to no good being provided.

3. What is the problem associated with common resources? How can we solve it?

the problem is that they are often overused to the point where the goods is gone or being depleted,

they can fix the issue by government regulation, or an arrangement for the people with common goods.

Listen to the Planet Money episode #472: "The One-Page Plan To Fix Global Warming" for the

following questions. https://www.npr.org/sections/money/2018/07/18/630267782/episode-472-the-one-page-plan-to-fix-global-warming-revisited

4. Why does a carbon tax solve the problem of climate change? Why does the

economist from MIT not advocate for other action like subsidizing solar power?

It can internalize the cost of greenhouse gas emissions.

cost, competition on the market, and how complex the climate is.

5. What negative consequences would we experience due to the carbon tax? Is

transporting goods a big part of the added cost?

Economic impact, competitiveness and can also leak if not taken care of (too much carbon is bad),

effectiveness and how it can impact the environment.

yes since fuel tax exist, supply chain, trade with other countries, and consumers.

6. Would the carbon tax completely end climate change? Should that be our goal?

no, because climate change is unpredictable and need a lot of way to be aware of what occur,

it always has been our goal since it require adaptability , mitigation, and technological advancement.

7. Why do you think economists like this solution better than regulating fossil fuel use?

because it allow more flexibility, it cost less and more effective, it can improve revenue generation and distribution,

it can reduce risk and improve safety, and can even improve the market.