Section I: We know that restrictions on international trade are bad for economic

Question

Section I:

We know that restrictions on international trade are bad for economic growth. Why then do we see such inefficient policies? Give two possible explanations. How likely do these explanations seem to you?

How do the costs of holding irrational views change in the following situations: a) while skydiving, b) while starting a business, and c) while voting? Briefly describe the concept of rational irrationality (no more than 2 sentences). What implications does this have for the effectiveness of political decision making?

In 2010 California considered legalizing marijuana. This move was strongly opposed by growers of illegal marijuana in Humboldt County, California. Explain the logic behind their position. What public choice theory story does this coincide with (hint: _____ and _______)?

Explanation / Answer

Answer. The restrictions on international trade is bad for economic growth but sometimes the government imposes restriction on international trade this is because to protect the domestic industries from the international competition. If the government charges tariffs on imports, the imports will become expensive relatively to domestically produced goods so demand for domestic goods rises. Another reason could be , to achieve the goal of self sufficiency. The government can restricts imports when the country is facing high currect account deficits. So for all these reasons, a country put restrictions on the international trade.

If someone has irrational views while doing the business then he or she cannot generate higher profits. A rational businessmen would always tries to maximize the revenue and minimize the cost. An irrational businessmen can do this in reverse.

If a voter has an irrational views during voting, then he or she may cast her vote on the basis of caste, religion, racism, that could make an undesirbale person win the elections.

A rational agent always act in the best possible way while an irrational behaves in the opposite way.

A political decision making should be rational way. If it is in irrational way, then the government or political leaders can benfit certain sections of the society at the cost of whole society. Rational behaiour is must in every field.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.