would be the difference, then, between the two types of trade barriers? Hint: It is not something you can

see from the graph.

39. From the Work It Out "Effects of Trade Barriers," you can see that a tariff raises the price of imports. What

is interesting is that the price rises by less than the amount of the tariff. Who pays the rest of the tariff

amount? Can you show this graphically?

40. If trade barriers hurt the average worker in an economy (due to lower wages), why does government create

trade barriers?

41. Why do you think labor standards and working conditions are lower in the low-income countries of the

world than in countries like the United States?

42. How would direct subsidies to key industries be preferable to tariffs or quotas?

43. How can governments identify good candidates for infant industry protection? Can you suggest some key

characteristics of good candidates? Why are industries like computers not good candidates for infant

industry protection?
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