EC120 Chapter Notes - Chapter 9: Absolute Advantage, Invisible Hand, Deadweight Loss
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EC120 Full Course Notes
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Many of the textiles and clothing that canadians consume are imported from abroad. All countries can benefit from trading with one another because trade allows each country to specialize in doing what it does best. We must explain how the international marketplace achieves these gains from trade or how the gains are distributed among various economic participants. The textile market is one in why policymakers often consider (and sometimes implement) trade restrictions to protect domestic producers from foreign competitors. We examine here the textile market is isoland: The isolandian textile market is isolated from the rest of the world. No one in isoland is allowed to import or export textiles, and the penalty for violating the decrees is so large that no one dare try. There is no international trade, the market exists for textiles in isoland consists solely of isolandian buyers and sellers.
