Indeed US is spending billions of dollars with other countries for things we need. However, the open trade and the trade agreements allow US also to use its comparative advantage and export the products or services that we have better technology and thus cheaper to provide. For example, we have a comparative advantage on computer technology. Wouldn't this lead to overall benefits for all?

Indeed US is spending billions of dollars with other countries for things we need. However, the open trade and the trade agreements allow US also to use its comparative advantage and export the products or services that we have better technology and thus cheaper to provide. For example, we have a comparative advantage on computer technology. Wouldn't this lead to overall benefits for all?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 2P

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Similar questions

If a country produces more food and electronics than another country does it have a comparative advantage?
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Happyland can produce 40 tones of marshmallows or 20 tones of chocolate in a year. Friendshipland can produce 80 tones of marshmallows or 40 tones of chocolate in a year. Can these countries benefit from trade with each other based on specialization and comparative advantage? Yes No
American worker takes 20 hours to produce one computer and 300 hours to produce an RV. A Japanese worker takes 30 hours to produce one computer and 450 Hours to produce an RV. Which country has a comparative advantage in what product? Why?
A friend tells you the following: “Free trade sounds good, but a country like Honduras doesn’t have any comparative advantage compared to the United States. Therefore, trade with us will exploit them and make their economic situation worse.” Explain to your friend the error in his thinking.
Since many companies cut jobs or outsource overseas when they cannot compete with foreign companies, does that mean free trade is a bad idea and does not serve our interests?
Imagine that you work for the World Bank and you have been called to Ghana to aid the new president to come up with a new international trade strategy. You are told that the new government is interested in moving away from agriculture and into manufacturing. To do so, the government wants to pursuit a policy of import substitution industrialisation (ISI). You are given a brief about Ghana highlighting the following points: About half of Ghana’s population depends on agriculture, but Ghana still imports some of its food. The majority of Ghana's people live in rural areas and exist on a subsistence way of life. Ghana has one of the highest rates of income inequality in the world. Nearly half of the population is employed in agriculture. QUESTION B.2 Explain import substitution industrialisation and how it can affect Ghana. What role does learning by doing play and when does it make sense for the government to interfere?
When two or more nations engage in free trade, how is the standard of living improved in the participating countries? goods become more expensive, demand rises, and output increases goods become cheaper, demand lowers, and output decreases goods become more expensive, demand lowers, output decreases goods become cheaper, demand rises, and output increases
Imagine that you work for the World Bank and you have been called to Ghana to aid the new president to come up with a new international trade strategy. You are told that the new government is interested in moving away from agriculture and into manufacturing. To do so, the government wants to pursuit a policy of import substitution industrialization (ISI). You are given a brief about Ghana highlighting the following points: About half of Ghana’s population depends on agriculture, but Ghana still imports some of its food. The majority of Ghana's people live in rural areas and exist on a subsistence way of life. Ghana has one of the highest rates of income inequality in the world. Nearly half of the population is employed in agriculture. After a meeting with Ghana’s president you learn that the government is also interested in repatriating migrants that went to European countries to study engineering a decade ago. Explain how this is likely to change Ghana’s comparative advantage
Imagine that you work for the World Bank and you have been called to Ghana to aid the new president to come up with a new international trade strategy. You are told that the new government is interested in moving away from agriculture and into manufacturing. To do so, the government wants to pursuit a policy of import substitution industrialization (ISI). You are given a brief about Ghana highlighting the following points: About half of Ghana’s population depends on agriculture, but Ghana still imports some of its food. The majority of Ghana's people live in rural areas and exist on a subsistence way of life. Ghana has one of the highest rates of income inequality in the world. Nearly half of the population is employed in agriculture. Ghana imports and exports food from and to neighbouring Côte d'Ivoire. The latter nation is very similar to Ghana in most ways. Can you explain what may drive two very similar nations to trade?
If each country specializes in the good in which it has a comparative advantage,....will gain from that trade because
Who are the winners and losers of the free trade between two countries? Can free trade between the two countries make consumers of both countries better off? In answering this question, consider discussing: How are you and your household connected to the global economy? Which imported goods and services do you buy? Are your consumption patterns based on comparative advantage? How do US trade patterns, based on comparative advantage, contribute to income inequality in the US, according to the Heckscher-Ohlin model? How has trade affected international income inequality? What were some recent tariffs? Who really pays the cost of tariffs?