7. How do trade barriers affect the average income level in an economy?

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20 • Review Questions 497

8. How does the cost of “saving” jobs in protected industries compare to the workers’ wages and salaries?

9. Explain how predatory pricing could be a motivation for dumping.

10. Why do low-income countries like Brazil, Egypt, or Vietnam have lower environmental standards than

high-income countries like the Germany, Japan, or the United States?

11. Explain the logic behind the “race to the bottom” argument and the likely reason it has not occurred.

12. What are the conditions under which a country may use the unsafe products argument to block imports?

13. Why is the national security argument not convincing?

14. Assume a perfectly competitive market and the exporting country is small. Using a demand and supply

diagram, show the impact of increasing standards on a low-income exporter of toys. Show the tariff's
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