/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q. 16. Are the gains from international... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 33: Q. 16. (page 804)

Are the gains from international trade more likely to be relatively more important to large or small countries?

Short Answer

Expert verified

International trade benefits the small countries more than the large countries.

Step by step solution

01

Step 1. Meaning of international trade.

It refers to the exchange of goods and services among people from different nations. Most economists argue that international trade is vital in improving the overall economic performance of a country. When a trader is buying from a trader in another nation, then the exchange is known as importing. Exporting is the selling of products to traders in other countries.

02

Step 2. Gain from international trading activities are most likely to be relatively more essential to small nationals than large countries.

Because:-

a) The absolute advantage is smaller in small countries and it would be difficult to produce everything the population wants or needs domestically.

b) The benefits of comparative advantage are proportional to the difference between the relative prices in world market and the relative prices that would prevail in home markets without trade.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

What is splitting up the value chain?

Are the gains from international trade more likely to be relatively more important to large or small countries?

Is it possible to have a comparative advantage in the production of a good but not to have an absolute advantage? Explain

True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain.

Under what conditions does comparative advantage lead to gains from trade?
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.