For small countries, free trade results in a higher level of national welfare than tariff protection.

Question

Quizplus · Accepted Answer

Free trade allows for specialization and efficiency, leading to lower prices and increased welfare for consumers. Tariff protection, on the other hand, reduces competition and raises prices, ultimately harming consumers and limiting overall welfare gains. In the context of a small nation like the one in the market for gasoline, free trade would likely lead to lower prices and increased consumer welfare.

For Small Countries, Free Trade Results in a Higher Level