2 major barrier on international trade , 2 positive externalities and 2 negative

Solutions

Expert Solution

Trade barriers are those restrictions imposed on international trade. Tariffs and quotas are some of the major barriers to international trade.

Tariff refers to the tax levied when a foreign good is imported. High taxes are charged to discourage international trade. Higher the tax, lesser the imports.

Quota refers to the imposing certain quantity for a good to be imported. The government decides the quantity.

Positive externality refers to the benefit enjoyed by the third party from an activity in which he is not involved. Education is a positive externality as an educated person can educate the society as well. Cleaning the environment would not only keep the house owner healthy but also to those people who pass by.

Negative externality refers to the cost incurred by a third person because of an economic activity.

Releasing toxic gases from industry pollutes the air which affects the residents staying nearby.

Smoking in public creates passive smokers. It worsens the passive smoker's health as well.

Rahul Sunny answered 11 months ago

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