Chapter 7: Global Markets in Action
The goods and services that we buy from other countries are
imports, and the goods and services that we sell to people are our
Comparative Advantage is the fundamental force that drives
international trade. It is the situation in which a person can perform
an activity or produce a good or service at a lower opportunity cost
than anyone else.
National Comparative Advantage is when a national c an perform an
activity or produce a god or service at a lower opportunity cost than
any other nation.
Gains and losses from Imports:
We measure the gains and losses from imports by examining their
effects on consumer surplus, produce surplus, and total surplus.
International Trade Restrictions:
Governments use four sets of tools to influence international trade
and protect domestic industries from foreign competition:
-Other import barriers
Tariffs: A tax on a good that is imposed by the importing country
when an imported good crosses its international boundary. Impor