Microeconomics,, 16th Canadian Edition

Canada is extremely well endowed with forests. It is no surprise, therefore, that it has a comparative advantage in a whole rang ...

advantage should be viewed as being dynamic rather than static. Many of today’s industries depend more on human capital than on ...

country’s natural endowments of land, labour, and natural resources are the prime determinants of its comparative advantage. The ...

32.2 The Determination of Trade Patterns Comparative advantage has been the central concept in our discussion about the gains fr ...

and potash, for which Canada is one of the world’s major suppliers, and demand in the rest of the world must be satisfied partly ...

price of an internationally traded product may be influenced greatly, or only slightly, by the demand and supply coming from any ...

Figure 32-5 An Exported Good The Pattern of Foreign Trade Let us now see what determines the pattern of international trade in s ...

Exports occur whenever there is excess supply domestically at the world price. The domestic demand and supply curves are D and S ...

Figure 32-6 An Imported Good An Imported Product Now consider some other product—for example, computer RAM chips. Once again, lo ...

shown in Figure 32-6 , the world price of RAM chips is below the Canadian no-trade price. At this low world price, domestic dema ...

Is Comparative Advantage Obsolete? It is sometimes said that the theory of comparative advantage is nearly 200 years old, and th ...

and by government policy than was previously thought. Thus, what is obsolete is the belief that a country’s current pattern of c ...

computers and failed miserably, wasting much public money in the process. The government of Ireland tried to create a comparativ ...

Applying Economic Concepts 32-2 Comparative Advantage and Global Supply Chains The discussion of comparative advantage developed ...

production facilities to be located in different countries. Third, the current very low costs of communication and transportatio ...

Such global supply chains even exist for some products that appear to have few “components,” such as fish. For example, a Canadi ...

Third, traditional data on international trade does not capture the extent of integration in global supply chains. The iPhone as ...

The Terms of Trade We have seen that world production can be increased when countries specialize in the production of the goods ...

Figure 32-7 An Improvement in the Terms of Trade 32-7 , indicates that only a small amount of cloth must be given up to get more ...

If, through international trade, Canada has access to different relative prices, Canada will be led to specialize in the product ...