... graphically and calculate the terms of trade gain, the efficiency loss, and thetotal effect on welfare of the tariff. PART 2 International Trade Policy 185188 PART 2 International Trade Policy Figure ... domestic parts. Then they will face anaverage cost of parts of $8000 (0.5 X $6000 + 0.5 X $10,000), which will be reflected inthe final price of the car.208 PART 2 International Trade Policy 4. ... than economics. We need to realizethat economic theory does not provide a dogmatic defense of free trade, something that it isoften accused of doing.196 PART 2 International Trade Policy consumers...