Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 19: Q 16. (page 462)

Are the gains from international trade more likely

to be relatively more important to large or small

countries?

Short Answer

Expert verified

Trade gains are relatively more important to small countries.

Step by step solution

01

Step 1. Definition

The exchange of capital, goods, and services across international borders or territories is referred to international trade.

02

Step 2. Explanation

Gains from international trade are more likely to be relatively more important to small countries. This is because small countries are not self-reliant and they have minimum room for specialization and fewer economies of scale. As large countries have large internal markets that’s why they have room for more specialization and have greater economies of scale but small countries don’t have this.

In smaller countries, there are no big internal markets and limited firms producing specialized products so smaller countries have no comparative advantage over bigger countries.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

In Exercise 19.31, is there an “ask” where Venezuelans may say “no thank you” to trading with Canada?

Can a nation’s comparative advantage change over

time? What factors would make it change?

How can there be any economic gains for a country from both importing and exporting the same good, like cars?

Look at Table 19.9. Is there a range of trades for

which there will be no gains?

From earlier chapters you will recall that technological change shifts the average cost curves. Draw a graph showing how technological change could influence intra-industry trade.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free