Microeconomics,, 16th Canadian Edition

Figure 32-3 The Gains from Trade with Constant Opportunity Costs gains from trade appears in Extensions in Theory 32-1 , where t ...

production of the good in which it has a comparative advantage. In each part of the figure, the slope of the upper, green line s ...

Without international trade, the bundle of goods produced must be the same as the bundle consumed. With international trade, the ...

Consumers are no longer limited by their own country’s production possibilities. Let us suppose that they prefer point to point ...

the original consumption possibilities boundary tt, there are points on the new boundary that allow more consumption of both goo ...

The conclusions about the gains from trade arising from international differences in opportunity costs are summarized below. 1. ...

Two Examples of Absolute and Comparative Advantage This box provides two simple examples to illustrate the concepts of absolute ...

Absolute Advantage Argentina is the more efficient producer of fish since its total resource cost ($2) is less than Brazil’s ($3 ...

its leather from Brazil; Brazil should produce leather and buy its fish from Argentina. Example #2 Switzerland and Austria can b ...

extra tonne of glass requires giving up of chocolate. In Switzerland, producing one extra tonne of glass “costs” of chocolate. S ...

The Gains from Trade with Variable Costs So far, we have assumed that opportunity costs are the same whatever the scale of outpu ...

foreign market, and by focusing on only a few versions of the product, it can achieve the benefits of the associated scale econo ...

its 1994 expansion into the North American Free Trade Agreement (NAFTA), which included Mexico. In several broad industrial grou ...

Figure 32-4 Economies of Scale Versus Learning by Doing In industries with significant scale economies, small countries that do ...

Specialization may lead to gains from trade through scale economies, learning by doing, or both. Consider a country that wants t ...

policies that discourage risk taking can lead to the rapid erosion of a country’s comparative advantage in particular products a ...

Sources of Comparative Advantage David Ricardo’s analysis teaches us that the gains from trade arise from the pattern of compara ...

country will have a comparative advantage in agricultural production and the second in goods that use much labour and little lan ...

Of course, if we consider “warm weather” a factor of production, then we could simply say that countries like Costa Rica are bet ...

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