4 marks) What is protectionism? If Canadian government imposes a quota explain using a diagram who are gainers and who are losers?

4 marks) What is protectionism? If Canadian government imposes a quota explain using a diagram who are gainers and who are losers? If instead Canadian government imposes a tariff, explain using a diagram who are gainers and who are losers? What are the additional benefits of a tariff over a quota?

1. (2 marks) To what extent are the conclusions of the theory of comparative advantage affected if unit costs increase, rather than remaining constant, as output increases?

        (c) (4 marks) A fixed exchange rate system may lead to painful adjustments in the

         domestic economy – explain with economic reasoning and appropriate diagrams