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Chapter 33: Q.16 (page 804)

Are the gains from international trade more likely to be relatively more important to large or small countries?

Short Answer

Expert verified

Small countries

Step by step solution

01

Step 1. Introduction 

International trade refers to the exchange of goods, services, and resources across international boundaries.

02

Step 2. Explanation 

In international trade, smaller countries receive greater benefits than larger countries. Smaller countries need international trade more than the larger countries as they have limited scope in internal trade. without international trade, they have limited possibilities to gain from comparative advantage.

Larger countries are already enjoying the benefits of internal trade so they have less need for international trade.

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Most popular questions from this chapter

Why might a low-income country put up barriers to trade, such as tariffs on imports?

Why might intra-industry trade seem surprising from the point of view of comparative advantage?

Under what conditions does comparative advantage lead to gains from trade?

What factors does Paul Krugman identify that supported expanding international trade in the 1800s?

In Exercise 33.31, is there an “ask” where Venezuelans may say “no thank you” to trading with Canada?
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