CH 4 INT.ECO
The Heckscher-Ohlin model assumes that trade occurs because countries have different resources.
This model contrasts the Ricardian one, which assumed that countries use their technological
comparative advantage to specialize in the production
The provision of a service or the production of various parts of a good in different countries is called
foreign outsourcing or offshoring.
Offshoring is trade in international inputs, which can sometimes cross borders several times before being
The graph Pm x MPLm is downward-sloping because as more labor is used in manufacturing, the
marginal product of labor in that industry falls, and the wages as well. The graph of Pa x MPLa in upwardsloping because we are measuring the labor used in agricul
CH 3 INT. ECO GAINS AND LOSSES FROM TRADE
The model we use to analyze the role of international trade in determining the earning of labor,
land and capital, assumes that one industry (agriculture) uses labor and land and the other
(manufacturing) uses lab
International trade means moving goods and services outside national borders.
At the end of this course we will know what products are traded, who sells them and who buys
them, at what quantities and prices they are traded, the costs and benefits of these
CH 2 INT. ECONOMICS
There are various reasons why a country buys good from another one. These include:
- Differences in technology
- Differences in resources
- Differences in the costs of offshoring
- The proximity of countries (proximity of countries aff
Economics 456 Due: February 23, 2017
Case 'Study Chapter 6 - China and India
a Read the Case on pages 321-325.
Prepare a typed, 2-page, double spaced paper (approximately 700 words) that addresses the
1. Summarize and discuss severa
Key to a Third Exercise Concerning Comparative Advantage
The 4th comparative advantage worksheet that I gave you was the same as the 3rd.
Home Labor (hours / year) Shoes (pair S / hour) L=2000 OLS=1 OLT=5 0.2
Foreign* L*=1000 O*LS=6 O*LT=6 1 1