12 Jul DISCUSS THE MARKET AND WELFARE CHANGES
Import Policies
Order Description
Essay on Imports and whether or not banning them from a country is good.
Initially a small developing country faces a given world price Ps and imports its basic staple food rice under a free trade policy. Then rice imports are banned because the government believes that self-sufficiency will improve the countrys overall welfare.
Write a two page essay explaining whether this policy could be a good idea. Please include the following elements in your answer.
Discuss the market and welfare changes associated with the import ban including effects on domestic price (pa) domestic production (Qp) and domestic demand (Qd). Also graphically identify the distribution of welfare and the overall level of welfare.
Review the conditions for success or possible causes of failure (economic structure of agriculture and the rest of the economy suggested by the rice policy experience in Indonesia. Also discuss the possibility of a similar policy based on Corn production in Africa.
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