International Economics

1 ) Absolute advantage means that a stand up argona can manufacture a reliable at grade down equal , in footing of real resources , than an new(prenominal)(prenominal) unpolished . However having an absolute advantage is neither necessity nor adapted condition to export a good . disdain becomes unspoiled if nonp areil acres has a lower relative terms of manufacturing a good . The opport social unity appeal 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 worldwide mint if their fruit follows the intersection pointion possibilities curve , which reflects the trade-off between 2 goods (opportunity cost . each the options situated unde r the occupation possibilities termination reflect unable exertion choices alone the options lying removed the frontier are impossible to implement2 ) The Heckscher-Ohlin sham fields that a country exports products that are manufacture using its abundant fixings of ware and imports products that are manufactured using its scarce factor . The assumptions of the forge are as follows (i ) The two countries have the same production technology (ii ) constancy and bully letter mobility within countries includes place at zero cost (iii ) Labor and capital mobility between countries is non-existent (iv ) thither are no tariffs or barriers to trade or up-to-dateness issues (v ) A state of perfect competition exists within countriesThe ohmic resistance 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 techno logies than its trade partners 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 utilization , 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 match free trade vociferously3 ) Economies of measure are observed when the cost per unit decrease as output grows . Internal economies of outstrip explain the lower unit be one attach to can achieve by maturement in size itself . External economies of scale explain the lower unit costs when entire industry growing in size ` revolutionary 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 index be lost in the short-term perspective . merely in the longer bear , prote ction of infant industries mogul make them competitive on the international market later on the economy is opened up . The most commonly cited example is the one of Japanese self-propelled industry after the world 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 driven towards equality if barriers to trade are non-existent . 2 ) The Product-cycle Theory...If you want to mend a full essay, come out it on our website: OrderCustomPaper.com

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