4.2
ECO 120
Module 4 Part 2
Survey of Economics

International Trade

Review/Preview of
Learning Objectives

Class Activities

Checkpoint Summary

Your Homework

Love for Econ...

Review/Preview of
Learning Objectives

This is an administrative note.

Preview of Module 5 (Review/Exam #1)

Module 5.1: Review
Weather and the schedule permitting, Module 5.1 is a review day on which you are asked to complete the Level 2 diagnostic quizzes for all assigned chapters and course objectives.

Module 5.2: Exam #1
1. Weather and the schedule permitting, Module 5.2 is the time during which you should take Exam #1.
Exam #1 is a closed book exam consisting of 33 questions, each preceded by the course objective against which your mastery will be measured. Mastery of every assigned course objective is expected. Questions on the exam closely parallel the practice problems and self-tests found in the text, study guide, and on MyEconLab.

2. Supplies: You may bring to the exam, a pen or pencil, an eraser, a ruler, and a calculator.

3. Notes and Restrictions: You may also bring one sheet of typing paper with any notes you care to record, subject to the following:

   (A) Your notes must be handwritten, not word processed.
   (B) You may not copy nor distribute your notes to any other person.
   (C) You must turn in your notes along with the exam;
          notes and exam become property of the instructor.
   (D) You may write on both sides of the typing paper.
   (E) The typing paper permitted is 8 1/2 " by 11."
   (F) Your name is neatly printed at the top left corner of the notes.

Preview

Master these learning goals.

20.3 Explain how trade barriers reduce international trade.

20.4 Explain the arguments used to justify trade barriers and show why they are incorrect but also why some barriers are hard to remove.

Class
Activities

Read your text. Complete your study guide.

20.3 Explain how trade barriers reduce international trade.
Slides number 43 through 59 deal with Course Objective 20.3 .
Click International Trade - 2004 Slides .

20.4 Explain the arguments used to justify trade barriers and show why they are incorrect but also why some barriers are hard to remove.
Slides number 60 through 70 deal with Course Objective 20.4 .

Checkpoint
Summary

Textbook page 587 summarizes the key points of International Trade.

1.	Tariff	A tax on a good that is imposed by the importing country when an imported good crosses its international boundary.
2.	Nontariff barrier	Any action other than a tariff that restricts international trade.
3.	Quota	A specified maximum amount of a good that may be imported in a given time period.
4.	Three arguments for protection	1. The national security argument 2. The infant-industry argument 3. The dumping argument
5.	Infant industry argument	The argument that it is necessary to protect a new industry to enable it to grow into a mature industry that cn compete in world markets.
6.	Dumping	Said to occur when a foreign firm sells its exports at a lower cost than its cost of production.
7.	Six fatally flawed arguments	1. Saves jobs. 2. Allows us to compete with foreign labor 3. Brings diversity and stability 4. Penalizes lax environmental standards 5. Protects national culture 6. Prevents rich countries from exploiting developing countries
8.	Two reasons trade is restricted	Less developed nations collect the majority of their taxes from tariffs rather than from sales and income. Rent seeking is the major reason behind restricting free trade.
9.	Rent seeking	Lobbying and other political activity that seeks to capture the gains from trade. (The gains and losses from international trade are not evenly distributed.)

Your
Homework

Complete all portions of the textbook and study guide relating to Checkpoint 20.3, and 20.4 on International Trade.

Take the optional post-study bonus point quizzes on International Trade on Saturday following Module 4.

Expect to review for and to take Exam #1 during Module 5.

Re-check your work for completeness, accuracy, and understanding on all portions of the textbook and study guide relating to Getting Started, Making and Using Graphs, The U.S. and Global Economies, The Economic Problem, and International Trade.

Take the optional pre-study bonus point quizzes on Demand and Supply on Sunday preceding Module 6.

Then read and study Supply and Demand course objectives 4.1 and 4.2 in your textbook and study guide
before attending the next class session following Exam #1.

Love for Econ
Springs Eternal !

Take a virtual internet trip through Patrick Henry Community College economics to visit the following Internet site:

http://www.heritage.org/

Love for econ springs eternal !