Protection

Question 1

Protection

Answer 1

Any action taken by government designed to give domestic producers an official advantage over a foreign producer

Question 2

Goal of protection

Answer 2

Increase domestic production

Reduce import consumption

Question 3

Costs of protection

Answer 3

Wasted resources 
Non-protected industries 
Reduced exports 
Consumers pay to cover costs
Net welfare loss, loss outweighs gains

Question 4

What type of tax is a tariff?

Answer 4

Regressive, effects poor who rely on cheap overseas goods

Question 5

Why are tariffs inefficient?

Answer 5

Deadweight loss

Question 6

Subsidy

Answer 6

Form of protection that increases government expenditure, therefore reviewed regularly