Write an essay on the gains from free international trade
What will be an ideal response?
Static gains from trade-trade leads to a new set of relative prices which, in turn, imply new consumption levels and a redistribution of resources in favor of comparative advantage industries. The combination of effects leads, in a static environment, to an improved standard of living. Dynamic gains from trade-trade can lead to an outward expansion of a country's production possibility frontier.
You might also like to view...
At the uniform abatement standard described above, find total abatement costs for both firms.
Among the identified point sources contributing to the pollution of Puget Sound are Dow Chemical (D) and Chevron (C). Each firm's cost functions are shown below. MACD = 2.5AD MACC = 3.75AC TACD = 1.25AD2 TACC = 1.875AC2 To meet the effluent limits under the Clean Water Act, each firm has an NPDES permit to release some fixed amount of effluents, so each must abate 30 units.
Suppose that in most car collisions between cars of unequal size, the smaller car sustains the most damage and its occupants suffer the most injury. In answering the following question, assume that, on average, smaller cars generate less air pollution than larger cars and that every person in the economy drives at least one car. In deciding what kind of car to buy, individuals:
A. will have a strong incentive buy large cars because large cars are safer than small cars. B. will fully internalize the full cost of the air pollution caused by larger cars. C. will fully internalize the safety benefit to others of driving a small car. D. not consider their own safety in deciding what kind of car to buy.
If quantity demanded rises significantly following a moderate price cut, then demand is:
A. Elastic. B. Inelastic. C. Unitary elastic. D. Most likely elastic.
In economics, the concept that individuals are motivated by self-interest and respond predictably to opportunities is known as
A. altruism. B. rational behavior. C. normative bias. D. empiricism.