Economia

ECON350 W-1 Answers:
1. What is international trade?
International trade is the exchange of goods and services betweencountries.
2. What are the benefits of international trade?
The international trade creates a bigger and greater competition from the suppliers this causes the price competition to be constant andultimately the ones benefited are the customers in need of those services and or goods.
3. Explain why some countries specialize in the production of certain goods and services.
For some countriesspecializing in the production of certain goods and services has paid off, simply because they are the biggest or best producer of those goods and services. Therefore they can trade those goods andservices with other countries for goods and services they need with the exception that items they acquire end up being cheaper or at no cost just because of their status as traders.

4. Brieflyexplain the law of absolute advantages and its implications for international trade.
The law of absolute advantage is nothing more than the ability a country has to produce a good or service with fewerresources. This makes that country the leader in trading of those specific goods and services, the rest of the trading countries have to trade their products based on the standards set by the leadercountry.
5. Based on the table, using one unit of the combination of labor, land and capital both countries will produce apples and oranges. Country A will produce a100 apples and 200 oranges.Country B will produce 400 apples and 100 oranges. Based on the law of absolute advantages Country A will have the advantage on the trading of oranges and will be able to even up the trading with countryB since Country B have the advantage on the trading because of its production of apples.
6. Briefly explain the law of comparative advantages and its implications for international trade.
The...