1. Governments use many tools to restrict imports. Which do you believe is most powerful at restricting imports: tariffs, import quotas or non-tariff barriers? Explain.

2. The country of Chancellor exports steel to the Land of Tanks. Information for the supply and demand curves in each country, in a world without trade, is given in the table below

Chancellor                                                                               Land of Tanks

A) What would be the equilibrium price and quantity in each country in a world without trade? How can you tell?

B) What would be the equilibrium price and quantity in each country in a world with trade? How can you tell?

C) Graph two supply and demand diagrams, one for each country, in the situation before trade. (make sure you label each graph as to what country it is representing)

D) Graph two supply and demand diagrams, one for each country, in the situation in a world after trade. (make sure you label each graph as to what country it is representing)3. "Protectionism has zero cost for the government, and therefore all the costs must fall on foreign companies who have their sales reduced." Is this statement true or false? Briefly explain. (1 point)

4. "Protectionism is a government subsidy from consumers of the protected product to producers." Is this statement true or false? Briefly explain.

5. "When a nation's economy expands its involvement with international trade, the total number of jobs in the economy usually declines." Is this statement true or false? Briefly explain.

6. Explain why advocates of free trade are bothered by the trend in the number of anti-dumping suits in recent years.

7. "Costs of environmental protection are usually a small and fairly unimportant determinant of the country in which multinational firms choose to locate." Is this statement true or false? Briefly explain