Chapter 9 - Application: International Trade

Free trade

________ in textiles could cause the price of textiles to fall, which would reduce the quantity of the textiles produced in Isoland.

Trade

________ allows production to be allocated and raises the living standard, whether it be at home or abroad.

International trade

________ allows productive firms to expand their markets.

small fire economy assumption

The ________ says that one country has little effect on the world's markets.

Tariffs

________ raise the prices of imported textiles above the world price and because of this, textiles are often priced depending upon the amount of the ________.

Economies of scale

________ are when some goods can be produced at lower costs only if they can be produced in large quantities.

infant industry

Economics are typically skeptical about the ________ argument.

Domestic producers consumers of a good

________ are better off, unlike domestic producers, who 're worse off.

Domestic prices

________ often rise when trading, in order to reach the world price.

International

________ increases the variety of goods, lowers the costs through economies of scale, increases competition, increases productivity, and enhances flows of ideas.

Tariff

________: a tax on goods produced abroad and sold domestically.

Tariffs

________ reduce the rate of consumption because of increased prices.