1. Trade Barriers
Economics
Mr. Hellums

2. What stands in the way of trade?
What increases the transaction costs: the distance, the terrain, the costs associated with operating the market, the nature of the good and red tape.
The idea here is to illustrate that what stands in the way of trade are distance, terrain, currency and nature of the good (icecream melts so until you discover the freezer, all ice-cream is produced locally) and paperwork.
They all raise transaction costs. That is why historically, the only traded goods were luxuries because the necessities were too costly to transport.
But transaction costs can be reduced through technology, through human action reducing paperwork, through monetary union.

3. Travel Time from New York City: 1800
Maps adapted from Charles O. Paullin, Atlas of Historical Geography, Carnegie Foundation, 1932

4. Travel Time from New York City: 1857

5. Travel Time from New York City: 1930 (by Rail)

6. European Monetary Union
An institutional change that helps information and goods flow faster and at lower cost.

7. What else restricts trade?

8. Government Trade Policies
Protectionism- policies that protect domestic industries from foreign competition
How?
Quotas: Limited number of imported Goods
Tariffs: Tax that raises the Price of imported goods

9. Why Do Some People Want Trade Restrictions?
If Everyone Gains, What’s the Problem?
All Consumers Gain - Goods Are Cheaper
Some Producers Lose - They Don’t Have a Comparative Advantage
People are Consumers and Also Workers for Producers
If you work for Ford, do you want higher tariffs on Japanese cars?

10. Candlemaker’s Petition – Outlaw sunlight
“Sun is an unfair competition”
Protect the candlemakers!
More jobs making candles/lights
Why is it ridiculous?
Light was for free, now it costs
Resources are used up
Overall, the result is we are poorer
For candlemakers’ petition, see

11. Voluntary Trade Makes Participants Better Off… and Creates Wealth
Bottom Line
Voluntary Trade Makes Participants Better Off… and Creates Wealth