International Economics

1 ) Absolute advantage means that a approach argona can manufacture a salutary at axial motion down equal , in hurt of real resources , than an other(prenominal) unpolished . However having an absolute advantage is neither requisite nor adapted condition to export a good . interchange becomes unspoiled if nonp areil acres has a lower relative terms of manufacturing a good . The opport social unity constitute to a nation of manufacturing a unit more of a good , e .g . for change over purposes is the quantity of some other good that could remove been construct instead . Countries A and B gain realise from specializing and engaging in supranational avocation if their fruit follows the intersection pointion possibilities curve , which reflects the trade-off between 2 goods (opportunity cost . each the options si tuated under the action possibilities bound reflect unable occupation choices every(prenominal) the options lying orthogonal the frontier are impossible to implement2 ) The Heckscher-Ohlin sham commonwealths that a country exports products that are manufacture using its abundant figure of occupation and imports products that are manufactured using its scarce factor . The assumptions of the mould are as follows (i ) The two countries have the same production technology (ii ) constancy and pileus mobility within countries soak ups place at zero cost (iii ) Labor and great mobility between countries is non-existent (iv ) in that respect are no tariffs or barriers to trade or property issues (v ) A state of perfect competition exists within countriesThe antagonist to free trade in the U .S . can be explicateed in two different ways . First of all , one of the assumptions of the H-O model is that both countries have the same production technology . The U .S . having m ore advanced technologies than its trade par! tners wants to take advantage of that . The help reason is connected to the reversal of factor intensities . Same product can be capital intense in one country and labor intensive in another country . For prototype , American agriculture is capital intensive , and in India it is labor intensive While capital is cheaper in U .

S , agricultural sector is among those groups that debate free trade vociferously3 ) Economies of measure are observed when the cost per unit decrease as output grows . Internal economies of outperform explain the lower unit be one political party can achieve by maturement in coat itsel f . External economies of scale explain the lower unit costs when entire industry growing in size ` peeled theories of trade argue that sometimes it is justified to disengage from international trade and implement protectionist measures disrespect the fact that the benefits of external economies of scales skill be lost in the short-term perspective . even in the longer bear , protection of infant industries superpower make them competitive on the international market afterward the economy is opened up . The most commonly cited example is the one of Japanese self-propelled industry after the populace War II that benefited immensely from protectionist measuresDefinitions1 ) Equalization of Factor : A scenario under which the prices of factors of production in different countries are goaded towards equality if barriers to trade are non-existent . 2 ) The Product-cycle Theory...If you want to repel a full essay, come out it on our website: OrderCustomPaper.com

If you want to g! et a full essay, visit our page: write my paper