MCS 1000 Lecture Notes - North American Free Trade Agreement, World Trade Organization, Voluntary Export Restraints

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 1000
• Professor: Linda Hunter

Document Summary

Imports goods and services that we buy from other countries. Exports goods and services that we sell to people in other countries. Comparative advantage is the fundamental force that drives international trade. Comparative advantage situation in which a person can perform an activity or produce a g or s at a lower opportunity cost than anyone else. National comparative advantage situation in which a nation can perform an activity or produce a good or service at a lower opportunity cost than any other nation ex. Opportunity cost of producing a t-shirt is lower in china than in canada, so. China has a comparative advantage in producing t-shirts . China can buy airplanes from canada at a lower opportunity cost than at which the. Lower cost in world price than domestic price = world market has a comparative advantage. Importing country: winners are those who whose surplus increases and the losers are those whose surplus decreases.