Answer to Question #91618 in Macroeconomics for Unknown287159

Question

1. Who would benefit and who would lose if south african government doubled the tariff on imported frozen chicken leg quarters from brazil?explain.
2. Use examples to explain the difference between absolute advantage and comparative (or relative) advantage in international trade.

Answer 1

1.If the South African government doubles the tariff for imported frozen chicken legs from Brazil, then:

1) along with the rise in price of imported chicken legs, there is a rise in prices for chicken legs of domestic production.

2) the introduction of a double tariff and the subsequent increase in prices leads to the fact that domestic production of chicken legs increases, domestic consumption decreases, and imports decrease.

3) Departure of double customs tariff.

4) The introduction of the customs tariff on imports is in the interests of domestic producers of goods competing with imports - they receive additional profits.

5) In addition, the customs tariff is an important revenue for the state budget.

So, economy of South Africa would benefit.

2.absolute advantage - an advantage that a country has, capable of using a given amount of resources, to produce more than other countries having the same amount of resources.

comparative advantage - an advantage that a participating country in international trade has if it can produce this product at lower relative costs than other countries.

Example of comparative advantage : in one country, oil is not deep from the surface of the earth, and it is cheaper to produce it than in other countries where oil is very deep in the rocks.