International Economics

1 ) Absolute advantage means that a come up argona can manufacture a undecomposed at string down equal , in legal injury of real resources , than an early(a)(prenominal) unpolished . However having an absolute advantage is neither unavoidable nor adapted condition to export a good . mete out becomes unspoiled if nonp areil acres has a lower relative terms of manufacturing a good . The opport social unity salute 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 external plow if their fruit follows the intersection pointion possibilities curve , which reflects the trade-off between 2 goods (opportunity cost . each the options situated u nder the end product possibilities term reflect unable performance choices alone the options lying foreign the frontier are impossible to implement2 ) The Heckscher-Ohlin sham provinces that a country exports products that are manufacture using its abundant promoter of return and imports products that are manufactured using its scarce factor . The assumptions of the influence are as follows (i ) The two countries have the same production technology (ii ) constancy and majuscule mobility within countries hit the bookss place at zero cost (iii ) Labor and seat of government mobility between countries is non-existent (iv ) on that point are no tariffs or barriers to trade or silver issues (v ) A state of perfect competition exists within countriesThe opposite word 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 more advanced technologies than its trade pa! rtners wants to take advantage of that . The help reason is connected to the reversal of factor intensities . Same product can be capital intensive in one country and labor intensive in another country . For font , 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 push free trade vociferously3 ) Economies of measure are observed when the cost per unit decrease as output grows . Internal economies of graduated table explain the lower unit cost one companion can achieve by maturement in sizing itself . External economies of scale explain the lower unit costs when entire industry growing in size ` sweet 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 business leader be lost in the short-term perspective . in so far in the longer bear , protection of infant industries talent make them competitive on the international market subsequently the economy is opened up . The most commonly cited example is the one of Japanese self-propelled industry after the knowledge base 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 impelled towards equality if barriers to trade are non-existent . 2 ) The Product-cycle Theory...If you want to live on a full essay, come out it on our website: OrderCustomPaper.com
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