Textbook Notes (367,906)
Canada (161,487)
Economics (923)
ECN 104 (388)
Chapter 9

Chapter 9 - Application: International Trade
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Department
Economics
Course
ECN 104
Professor
Tsogbadral Galaabaatar
Semester
Fall

Description
Chapter 9The World Price andComparative AdvantagePthe world price of a goodWthe price that prevails in world markets Pdomestic price without tradeD IfPPDW country has comparative advantage in the goodunder free trade country exports the goodIfPPDW country does not have comparative advantage under free trade country imports the good The Small Economy AssumptionA small economy is a price taker in world marketsIts actions have no effect on P W Canada suits the definition of a small economy When a small economy engages in free trade P is the only relevant price W No seller would accept less than P since Wshe could sell the good for P in world marketsW No buyer would pay more than P sinceWhe could buy the good for P in world marketsWOther Benefits of International Tra
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