ANSWERS TO TUTORIAL WEEK 13(International Trade) Q2

a) Tariffs, "quantitative restrictions" or quotas and cumbersome inmport procedures that restrict trade.

b) Infant industries that are protected often fail to grow up anf therfore need to be protected indefinitely e.g. Bangadesh film industry.

c) Free trade allows the developing country to mass produce and beefit from economics of scale.

d) No; this is because the moment protection is removed, jobs will be lost because the industries protected cannot compete with foreign imports.

e) Gainers: producers and employees of protected industries (higher prices and profit; higher wages and job security"). Losers: consumers (limited choice and higher prices for relatively inferior quality products).

f) With protectionism, the benefits of free trade are lost: greater product choice, improved quality and lower prices. Also lost are thebenefits of free trade on the domestic economy: free trade encourages price competition that forces cost and management efficiency, thus raising productivity; free trade creats vast markets and procides market access for domestic firms and allows economies of scale; in short, free trade stimulates the coutnry's economic growth.