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9 Book Notes – Econ 201

9 Book Notes – Econ 201 - 9 Book Notes Econ...

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9 Book Notes – Econ 201 Today, much of the textiles and clothing that Americans consume are imported TEXTILES World Price: the price of a good that prevails in the world market for that good WP > Domestic P = export WP < DP = Import New countries entering the market have to be price takers No seller would accept less than the WP and no buyer would pay more than the WP. The World’s Demand curve is perfectly elastic Check notebook for explanation of international trade diagram Graph on Page 180 2 conclusions: - When a country allows trade and becomes an exporter of a good, domestic producers of the good are better off, and domestic consumers of the good are worse off - Trade raises the economic well-being of a nation in the sense that the gains of the winners exceed the losses of the losers When trade forces the domestic price to fall, the consumers benefit. - When a country allows trade and becomes an importer of a good, domestic consumers of the good are better off, and domestic
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