Question
A small country cannot infl uence the price of any of the goods that it trades. What is the optimum tariff level on its imports?
Step 1
This means that the country is a price taker in the international market. Show more…
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"For a small country like the Philippines, a move to free trade would have huge advantages. It would let consumers and producers make their choices based on the real costs of goods, not artificial prices determined by government policy; it would allow escape from the confines of a narrow domestic market; it would open new horizons for entrepreneurship; and, most important, it would help to clean up domestic politics." Separate out and identify the arguments for free trade in this statement.
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