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Principles of Microeconomics-Discussion (2)

Principles of Microeconomics-Discussion (2)

Q 1) The Boomerang effect. http://www.economist.com/node/21552898 2) Comparative Advantage and American Jobs. http://online.wsj.com/article/SB10001424052748703555804576102500952966450.html You are expected to make your own contribution in a main topic as well as respond with value-added comments to at least two of your classmates. You are encouraged to respond to other students as well as to your instructor. In your initial response to the topic you have to answer all questions: 1) Does the protection of one domestic industry harm another? Please explain. 2) Why does comparative advantage matter more than absolute advantage for trade? Please explain. 3) Reflection – the students also should include a paragraph in the initial response in their own words reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace.

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It is highly probable that protection of one domestic industry would have an adverse effect on another. One of the major examples of this is the impact of the steel and aluminium tariff on the U.S. auto industry. The tariff on aluminium and steel, proposed by the President trump would increases the price of that product imported from the other countries. It would be beneficial for these two particular industries as it would increases the demand of the domestic products of these two industries. But other industries those use the steel and aluminium as their raw materials have been affected greatly due to this deal.