ECON 101 Lecture Notes - Lecture 25: Outsourcing, International Trade, Sweatshop
Document Summary
Import quotas: a legal limit on the quantity of a good that can be imported. Usually administered through licenses: a number of licenses are issued, each giving the license-holder the right to import a limited quantity of the good each year. Its effect is like that of a tariff, except the revenues the quota rents accrue to the license-holder, not to the government. Despite deadweight losses, import protections are often imposed because groups representing import-competing industries are smaller and more cohesive than groups of consumers. National security domestic industries: oil, steel, defense, food. In times of national crisis or war the united states must be able to rely on key. Protection is required even during peacetime to ensure their availability. Note: u. s. generally follows a policy of free trade. Most manufactured goods are subject either to no tariff or a low tariff. Additional jobs created in import-competing industries as a result of trade.
