Question

1. International Trade

1. What is the difference between an absolute and comparative advantage? Give an example.
2. What are two ways nations prohibit trade? (Make sure to include the appropriate graphs for both the U.S. and the foreign country) who benefits and who pays for this action?

Answer 1

Ans :- A

Absolute advange is indicate the those nation that is best in manufacturing goods in the less time by using their own resources like their labors , raw materials etc.

absolute advantage can be usable as a comparison when product is same.

Ex:- we assume china manufacture 30 computer's one month. And U.S. manufacturer 60 computer's with good finishing quality in 15 day.

in this china taking 1 computer for 1 day and U.S. produce 4 computer's in a one. So absolute advantage have U.S. and they show efficient labour, good quality rathe than China.

Comparative advantage is indicate those nation that is on the lose and compare wrong product with another by consider opportunity cost can reduce.

Ex:- we assume canada produce 50 camera's daily and produce 100 mobile daily. So the opportunity cost of camera is100/50 = 2. And opportunity cost of mobile is 50/100 = 0.5. it get possossion when we see in U.S. opportunity cost of mobile is 0.5. so it is more beneficial for U.S. for production of mobile and camera for thailand.

Although canada is efficient then , they give absolute advange other they have to make a international trade agreement that are beneficial for both.

Ans :- B

there are many way in non terrif for prohibiting the trade.

1) Embargo :- it is a type of quota that prohibiting the trade. It may be imposed on both export and import without concern volume of quantity. Although it mostly used by political agenda, and for economic reasons.

2) voluntary Export restraint :- it is a restriction set by the govt. bodies on quantity of goods that export out of the country during a special period of time.

This graph on the besis of 2020 pendamic COViD-19. effect and after the Baning and prohiboting chinese peoduct in USA.

In this graph cam USA proforme good in the trade from 2016 to till 2019 but after lockdown and prohibited chinese product in market in the real world they not effect any in this pemdamic alternativly Chines trade grow up and USA trade fall down. So you se there no effect of any prohibiting on someone when thar have power of large level of manufacturering unit & raw material

World Trade of Two Countries 600 sto China Un8.5 In Billion you USA. 300 200 + + + 16 17 18 19 20 21

World Trade of Two Countries 600 sto China Un8.5 In Billion you USA. 300 200 + + + 16 17 18 19 20 21