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Suppose that a technological advance in Japan lowers the world price of televisions. a. Assume Switzerland is an importer of televisions and there are
Suppose that a technological advance in Japan lowers the world price of televisions. a. Assume Switzerland is an importer of televisions and there are no trade restrictions. How does the technological advance affect the welfare of Swiss consumers and Swiss producers? What happens to total surplus in Switzerland? b. Now suppose that Switzerland has a quota on television imports. How does the Japanese technological advance affect the welfare of Swiss consumers, Swiss producers and the holders of import licences?
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