Activity pg.

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1. The barrier will influence the rich people in povertania, making it tough for them to
afford the cars as once importation has been limited, the tax for import car will
increase leaving them no choice but to chose any other alternatives which makes the
local car price in povertania to increase, making it more difficult for the poor to afford
a car in povertania, Whereas in Richland the car price might have chances to decrease
making both rich and poor to afford Richland cars.
2. The barrier will reduce import of cloth from Povertania. When Richland double its
price in the country, because of fashionable trend, the rich people in Richland does not
find the increase of price as a problem. The demand still keeps increasing, while
supply declines.
On the other hand, when barrier of cloth export exists, Povertania will sell its cloth to
Richland at higher price while their cost of cloth production and its peoples income
remain unchanged. Therefore, to cover the cost of export, Povertania also has to
increase its selling price in domestic market. It creates burden on poor people in the
country that they cannot afford to buy cloth at high price.