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Susan works in a factory that makes televisions. The country in which she works just entered into a free trade agreement with several other countries. While Susan is concerned about increased competition from the countries that can now export their goods to her country tariff free, she is excited that her company is implementing new procedures at work to be more efficient. Within six months, her company is producing better televisions than before. Scenario 2 Claudia works in a factory that makes computers. Her country just imposed tariffs on all computers coming into the country. While Claudia is happy that the tariff reduces the chances of losing her job, she has noticed that the quality of the computers made at her factory has fallen. People are late to work, machines that break don’t get fixed, and no one seems to be talking about any new ideas. What effect do tariffs have on Susan’s and Claudia’s workplaces?

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Answer: Claudia's factory has become less efficient because of the imposed tariffs. It is causing people to be late to work, machines to break and not get fixed, and people are not contributing new ideas. Therefore Claudia's factory will suffer and Susan's factory will improve.

Explanation:

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Answer:

The absence of tariffs creates competition for Susan’s company. To compete against foreign television makers, Susan’s company makes dedicated efforts to improve quality and efficiency. On the other hand, Claudia’s company is now shielded from foreign competition by tariffs, so the workers have developed a complacent attitude and the company has become less efficient.

However, the absence of tariffs has a less desirable effect on job security. The possibility of Susan losing her job has increased, but Claudia’s job is more secure than before.

Explanation:

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