CH 7 econ - Two main tools: ± Tariffs: tax on imports ±...

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1 Main Concepts ± Review: comparative advantage ± Markets with International Trade ± Trade restrictions: how they work ± Relating this model to core concepts. Patterns and Trends in International Trade Imports are the good and services that we buy from people in other countries. Exports are the goods and services we sell to people in other countries. BEA: Bureau of Economic Analysis
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2 The Gains from International Trade Comparative Advantage A country has a comparative advantage in producing a good if it can produce that good at a lower opportunity cost than any other country. International Trade Restrictions
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Unformatted text preview: Two main tools: ± Tariffs: tax on imports ± Nontariff barriers: other restrictions (e.g. quota) 3 The Case Against Protection It is often argued that international trade should be restricted to ± Protect national security ± Protect infant industries ± Punish dumping ± Saves jobs ± Allows us to compete with cheap foreign labor ± Brings diversity and stability to our economy ± Penalizes nations with lax environmental standards ± Protects national culture ± Prevents rich nations from exploiting poor ones...
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This note was uploaded on 11/05/2009 for the course BIO econ 001 taught by Professor Stein during the Spring '09 term at UPenn.

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CH 7 econ - Two main tools: ± Tariffs: tax on imports ±...

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