- What surprised you most about the concepts in this chapter? Why?
- What is your opinion about international trade? Overall is it good or bad? Why?
International trade is not only beneficial between two countries, but also essential. Until a single country can effectively and efficiently produce all the goods they need, it is a very good thing. Trade among different nations almost ensures that monopolies don't price their goods above marginal costs. Also, thinking back to chapter 1 in regards to efficiency, trade is important because it forces each company, or nation to produce the most output with the least input. Two last benefits I thought of for international trade include greater variety of goods/services to consume as well as the ability to expand production beyond just the domestic borders. If each nation has a comparative advantage and benefits from trade because of specialization, the resulting imports and exports provide consumers with greater variety to choose/benefit from than if they were not even options. Lastly, if a country specializes in producing a good that is aimed at people worldwide, think how that benefits the producer by being able to export their good to multiple different countries rather than limited to its own borders.
I think one thing I found surprising was the idea that although international trade makes a country as a whole better off, it can make individuals of the country worse off. To determine whether or not free trade is a good thing, I suppose you have to look at the majority benefit. The text states that this is because each country has many citizens with different interests. I think I found this interesting because by definition international trade doesn't really identify with an individual until you break it down to that individual level. I imagine this is a good perspective to have in policy-making. Importing good X and exporting good Y is going to have a different effect on the producers of good X and goo Y; negative and positive, respectively.
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