10 Questions
Buying and selling among nations is generally beneficial for all parties involved.
True
If a firm purchases a cheaper product from abroad, only that firm benefits while the domestic producer loses out.
False
Countries are always better off when they import products produced more efficiently in other countries.
False
When a foreign producer sells products abroad, it only benefits the producer and not the country of origin.
False
International trade can lead to domestic conflicts due to differences in opinions about its benefits.
True
What is the consensus among most economists regarding international trade?
It makes the world better off.
Why do consumers and firms sometimes prefer buying goods or services from abroad?
To find products that better suit their needs.
What is a key benefit for foreign producers when they sell products abroad?
Earning foreign exchange that can be used to buy foreign-made products.
Why is it stated that not every individual or company is better off with international trade?
Because domestic producers may lose sales when a cheaper foreign product is purchased.
In what cases does the text suggest that importing products leads to a benefit for the world?
When the costs of production include social costs like pollution.
Study Notes
International Trade
- International trade is generally beneficial for all parties involved.
- Importing cheaper products from abroad can benefit the purchasing firm, but harm the domestic producer.
Key Benefits of International Trade
- Countries are better off when they import products produced more efficiently in other countries.
Benefits for Foreign Producers
- When foreign producers sell products abroad, they benefit from the sale.
Controversy Surrounding International Trade
- International trade can lead to domestic conflicts due to differences in opinions about its benefits.
Consensus Among Economists
- Most economists agree that international trade is beneficial.
Consumer and Firm Preferences
- Consumers and firms may prefer buying goods or services from abroad due to better quality, lower prices, or other advantages.
Limitations of International Trade
- Not every individual or company is better off with international trade, as some may lose out due to foreign competition.
Cases Where Importing Leads to Benefits
- Importing products leads to a benefit for the world when countries specialize in producing goods and services in which they have a comparative advantage.
Learn about the advantages of international trade and how it can improve living standards in different countries. Explore why economists generally support trade among nations despite its contentious nature.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
