INSTRUCTOR DISCUSSION NOTES:
Can Africa Survive by Producing Like Asia?

1. Why would the US government wish to impose tariffs on Chinese imports of textiles, but not on African imports?

An infant industry argument can be made here.

2. Indicate in a graph of supply and demand for Chinese textiles the impact of a tariff on Chinese goods. Do the same in the market for African textiles. Do you get the same result? Why or why not?

In the Chinese market, supply shifts left, causing price to rise. In the African market, demand rises, causing price to rise.

3. What benefits result from the Lesotho government’s program to combat AIDS? Does that help Lesotho compete with China? Why or why not?

Yes, it does help Lesotho compete, because hopefully the Lesotho workforce will become healthier, more productive, and therefore, more competitive.

Multiple Choice/True False Questions

1. By imposing tariffs on Chinese imports into the US and not on African imports, the US caused Chinese goods to be ________ than African goods.
  1. More expensive
  2. Less expensive
  3. Equal in value
  4. Better quality
     ANS. A

2. A quota on imported goods will necessarily cause fewer items to be imported than a tariff.
  1. True
  2. False
     ANS. B

3. Chinese textiles and African textiles, in the eyes of the US, can be judged to be
  1. Substitutes
  2. Complements
  3. Luxuries
  4. Necessities
     ANS. A

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