the country which has comparative advantage and the country which gains from international trade.

Question

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Answer 1

Question

Chapter 9, Problem 1SPPA

To determine

To find: the country which has comparative advantage and the country which gains from international trade.

Expert Solution & Answer

Explanation of Solution

The graph for Brazil's shoe market shows the lower price of shoes and high quantity as compared to the U.S. shoe market. Hence, Brazil has a comparative advantage in the manufacturing of shoes.

Brazil would export the shoes which would increase the shoe's supply in the U.S. market and consequently, the price of shoes in the U.S. market will decrease.

The production of shoes by the U.S. producers has a high opportunity cost and Brazil has a lower opportunity cost. Hence, Brazil would gain from export and the U.S would have gained from import.

Economics Concept Introduction

Trade:

Trade is an economic activity which includes the buying and selling of goods and services. Under the trade process, compensation is paid by buyer to the sellers in the form of currency.

Opportunity cost:

The opportunity cost is the cost of using the next best alternative. For example, harvesting with manual labor is replaced by harvesting with machinery. Hence, the opportunity cost of using machinery is the cost of manual labor forgone.

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Students have asked these similar questions

Economics A trade expert compares the modern tariffs to the Depression-era Smoot-Hawley tariffs. He says “The economic impact is going to take years to play out." What was the effect of the Smoot- Hawley tariffs on U.S. trade? a) Both imports and exports rose by nearly about the same amount, the trade balance remained about the same, and the total volume of trade increased. b) Both imports and exports fell by nearly about the same amount, the trade balance remained about the same, and the total volume of trade decreased. c) Imports decreased, and the trade balance increased. The total volume of trade was nearly unchanged. d) Imports decreased, and the trade balance was nearly unchanged. The total volume of trade decreased.

The graph above is the U.S. market for some imported good. Supply is a flat curve. The U.S. can import the Chinese good for $40 and the Mexican good for $48. Assume the U.S. imposes $10 tariffs on each unit of the imported good. What will be the quantity imported? From which country? How your answer will change if the U.S. keep the $10 tariffs but join a trade bloc with Mexico? Will the country’s wellbeing increase or decrease? By how much (hint find the change in consumer surplus and the change in government revenue)? Explain your answers.

The figure shows the markets for shoes if there is no trade between the United States and Brazil. Which country has a comparative advantage in producing shoes? With international trade, explain which country would export shoes and how the price of shoes in the importing country and the quantity produced by the importing country would change. Explain which country gains from this trade.

Answer 2

Question

Chapter 9, Problem 1SPPA

To determine

To find: the country which has comparative advantage and the country which gains from international trade.

Expert Solution & Answer

Explanation of Solution

The graph for Brazil's shoe market shows the lower price of shoes and high quantity as compared to the U.S. shoe market. Hence, Brazil has a comparative advantage in the manufacturing of shoes.

Brazil would export the shoes which would increase the shoe's supply in the U.S. market and consequently, the price of shoes in the U.S. market will decrease.

The production of shoes by the U.S. producers has a high opportunity cost and Brazil has a lower opportunity cost. Hence, Brazil would gain from export and the U.S would have gained from import.

Economics Concept Introduction

Trade:

Trade is an economic activity which includes the buying and selling of goods and services. Under the trade process, compensation is paid by buyer to the sellers in the form of currency.

Opportunity cost:

The opportunity cost is the cost of using the next best alternative. For example, harvesting with manual labor is replaced by harvesting with machinery. Hence, the opportunity cost of using machinery is the cost of manual labor forgone.

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Answer 3

Question

Chapter 9, Problem 1SPPA

To determine

To find: the country which has comparative advantage and the country which gains from international trade.

Expert Solution & Answer

Explanation of Solution

The graph for Brazil's shoe market shows the lower price of shoes and high quantity as compared to the U.S. shoe market. Hence, Brazil has a comparative advantage in the manufacturing of shoes.

Brazil would export the shoes which would increase the shoe's supply in the U.S. market and consequently, the price of shoes in the U.S. market will decrease.

The production of shoes by the U.S. producers has a high opportunity cost and Brazil has a lower opportunity cost. Hence, Brazil would gain from export and the U.S would have gained from import.

Economics Concept Introduction

Trade:

Trade is an economic activity which includes the buying and selling of goods and services. Under the trade process, compensation is paid by buyer to the sellers in the form of currency.

Opportunity cost:

The opportunity cost is the cost of using the next best alternative. For example, harvesting with manual labor is replaced by harvesting with machinery. Hence, the opportunity cost of using machinery is the cost of manual labor forgone.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 9, Problem 1SPPA

To determine

To find: the country which has comparative advantage and the country which gains from international trade.

Expert Solution & Answer

Explanation of Solution

The graph for Brazil's shoe market shows the lower price of shoes and high quantity as compared to the U.S. shoe market. Hence, Brazil has a comparative advantage in the manufacturing of shoes.

Brazil would export the shoes which would increase the shoe's supply in the U.S. market and consequently, the price of shoes in the U.S. market will decrease.

The production of shoes by the U.S. producers has a high opportunity cost and Brazil has a lower opportunity cost. Hence, Brazil would gain from export and the U.S would have gained from import.

Economics Concept Introduction

Trade:

Trade is an economic activity which includes the buying and selling of goods and services. Under the trade process, compensation is paid by buyer to the sellers in the form of currency.

Opportunity cost:

The opportunity cost is the cost of using the next best alternative. For example, harvesting with manual labor is replaced by harvesting with machinery. Hence, the opportunity cost of using machinery is the cost of manual labor forgone.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 1SPPA

To determine

To find: the country which has comparative advantage and the country which gains from international trade.

Expert Solution & Answer

Explanation of Solution

The graph for Brazil's shoe market shows the lower price of shoes and high quantity as compared to the U.S. shoe market. Hence, Brazil has a comparative advantage in the manufacturing of shoes.

Brazil would export the shoes which would increase the shoe's supply in the U.S. market and consequently, the price of shoes in the U.S. market will decrease.

The production of shoes by the U.S. producers has a high opportunity cost and Brazil has a lower opportunity cost. Hence, Brazil would gain from export and the U.S would have gained from import.

Economics Concept Introduction

Trade:

Trade is an economic activity which includes the buying and selling of goods and services. Under the trade process, compensation is paid by buyer to the sellers in the form of currency.

Opportunity cost:

The opportunity cost is the cost of using the next best alternative. For example, harvesting with manual labor is replaced by harvesting with machinery. Hence, the opportunity cost of using machinery is the cost of manual labor forgone.

Answer 6

Chapter 9, Problem 1SPPA

To determine

To find: the country which has comparative advantage and the country which gains from international trade.

Expert Solution & Answer

Explanation of Solution

The graph for Brazil's shoe market shows the lower price of shoes and high quantity as compared to the U.S. shoe market. Hence, Brazil has a comparative advantage in the manufacturing of shoes.

Brazil would export the shoes which would increase the shoe's supply in the U.S. market and consequently, the price of shoes in the U.S. market will decrease.

The production of shoes by the U.S. producers has a high opportunity cost and Brazil has a lower opportunity cost. Hence, Brazil would gain from export and the U.S would have gained from import.

Economics Concept Introduction

Trade:

Trade is an economic activity which includes the buying and selling of goods and services. Under the trade process, compensation is paid by buyer to the sellers in the form of currency.

Opportunity cost:

The opportunity cost is the cost of using the next best alternative. For example, harvesting with manual labor is replaced by harvesting with machinery. Hence, the opportunity cost of using machinery is the cost of manual labor forgone.

Answer 7

Chapter 9, Problem 1SPPA

To determine

To find: the country which has comparative advantage and the country which gains from international trade.

Answer 8

Expert Solution & Answer

Explanation of Solution

The graph for Brazil's shoe market shows the lower price of shoes and high quantity as compared to the U.S. shoe market. Hence, Brazil has a comparative advantage in the manufacturing of shoes.

Brazil would export the shoes which would increase the shoe's supply in the U.S. market and consequently, the price of shoes in the U.S. market will decrease.

The production of shoes by the U.S. producers has a high opportunity cost and Brazil has a lower opportunity cost. Hence, Brazil would gain from export and the U.S would have gained from import.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Trade:

Trade is an economic activity which includes the buying and selling of goods and services. Under the trade process, compensation is paid by buyer to the sellers in the form of currency.

Opportunity cost:

The opportunity cost is the cost of using the next best alternative. For example, harvesting with manual labor is replaced by harvesting with machinery. Hence, the opportunity cost of using machinery is the cost of manual labor forgone.

Answer 12

Ch. 9 - Prob. 1SPPA Ch. 9 - Prob. 2SPPA Ch. 9 - Prob. 3SPPA Ch. 9 - Prob. 4SPPA Ch. 9 - Prob. 5SPPA Ch. 9 - Prob. 6SPPA Ch. 9 - Prob. 7SPPA Ch. 9 - Prob. 8SPPA Ch. 9 - Prob. 9SPPA Ch. 9 - Prob. 10SPPA

the country which has comparative advantage and the country which gains from international trade.

To find: the country which has comparative advantage and the country which gains from international trade.

Explanation of Solution

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Chapter 9 Solutions