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Q. Several argue that tariffs always hurt the imposing country's economic welfare, and are typically designed to shift resources from one part to another, protected or preferred one, within an economy. Search and discuss a counter example to this argument.
Answer: The optimal tariff is theoretically a first-best trade policy.
Q. Albania refused to engage in international trade for ideological reasons. To maximize its economic welfare it could choose to produce at which point in the diagram above? Sup
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