Chapter 9 Microeconomics \u2013 International Trade - Chapter 9 Microeconomics International Trade Learning Outcome Apply Microeconomic Theory to

Chapter 9 Microeconomics – International Trade - Chapter...

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Chapter 9 Microeconomics – International Trade Learning Outcome Apply Microeconomic Theory to particular issues and problems, including taxes, government price supports, Trade and so on Learning Objectives What determines whether a country imports or exports? Who wins and who loses from international trade? The gains to winners exceed the losses of losers The welfare effects of tariffs and import quotas The arguments people use to advocate trade restrictions International Trade Principle of Comparative Advantage : All countries can benefit from trade because trade allows each country to specialize in doing what it does best How the international marketplace achieves these gains from trade or how the gains are distributed among various economic participants The effects of international trade on economic well-being using the tools of Consumer Surplus and Producer surplus The Determinants of Trade Market for Textiles in the imaginary Country of Isoland: Well suited to examining the gains and losses from international trade: o Textiles are made in many countries around the world, and there is much world trade in textiles o The textile market is one in which policymakers often consider trade restrictions to protect domestic producers from foreign competitors The Equilibrium without Trade: No international trade The market for textiles in Isoland consists solely of Isolandian buyers and sellers
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Consider the following three questions to evaluate a possible change in Trade Policy:
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