{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 9 Lecture Outline - Economics 101H Vandan Desai...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 101H Vandan Desai P a g e | 1 Chapter 9: Application – International Trade (Lecture Outline) -------------------------------------------------------------------------------------------------------------------------- I. The Determinants of Trade A. The Equilibrium without Trade i. Assume: A country isolated from rest of the world and produces steel The market for steel consists of the buyers and sellers in the country No one in the country is allowed to important or export steel ii. Results: Domestic price adjusts to balance demand and supply The sum of consumer and producer surplus measures the total benefits that buyers and sellers receive B. The World Price and Comparative Advantage i. If the country decides to engage in international trade, will it be an importer or exporter of steel? ii. The effects of free trade can be shown by comparing the domestic price of a good without trade and the world price of the good iii. World Price: price that prevails in the world market for that good World Price > Domestic Price = Export (Has Comparative Advantage) World Price < Domestic Price = Import (glyph817o Comparative Advantage) iv. Trade among nations is ultimately based on comparative advantage Trade is beneficial b/c it allows each country to specialize in doing
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern