Protectionism+Essay


 * 3. (a) Explain the reasons why countries trade with each other. //[10 marks]//**
 * (b) Given the benefits of trade, evaluate the economic arguments in favour of** **protectionism. //[15 marks]//**


 * This Q was in SL P1 November 2006**

Candidates **may** include any of the following: **•** differences in factor endowments **•** variety and quality of goods **•** gains from specialization **•** political considerations **•** learning about new production techniques and technology HL candidates need to mention “comparative advantage” for full marks.SL do not
 * 3. (a) Explain the reasons why countries trade with each other.****//[10 marks]//**

Candidates **may** include any of the following: **•** infant industry argument **•** efforts of a developing country to diversify **•** protection of employment **•** source of government revenue **•** strategic arguments **•** means to overcome a balance of payments disequilibrium **•** anti-dumping **•** maintenance of health, safety and environmental standards
 * (b) Given the benefits of trade, evaluate the economic arguments in favour** **of protectionism.** **//[ 15 marks]//**

Effective evaluation may be to: **•** consider short run versus long run consequences **•** examine the impact on different stakeholders **•** discuss advantages and disadvantages **•** prioritize the arguments