Table of contents

1. Introduction to Macroeconomics1h 57m
2. Introductory Economic Models59m
3. Supply and Demand3h 43m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Price Floors3h 40m
6. Introduction to Taxes1h 25m
7. Externalities1h 3m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. Introducing Economic Concepts49m
11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)1h 37m
12. Unemployment and Inflation1h 15m
13. Productivity and Economic Growth1h 17m
14. The Financial System1h 37m
15. Income and Consumption52m
16. Deriving the Aggregate Expenditures Model1h 22m
17. Aggregate Demand and Aggregate Supply Analysis1h 18m
18. The Monetary System1h 1m
19. Monetary Policy1h 32m
20. Fiscal Policy1h 0m
21. Revisiting Inflation, Unemployment, and Policy46m
22. Balance of Payments30m
23. Exchange Rates1h 16m
24. Macroeconomic Schools of Thought40m
25. Dynamic AD/AS Model35m
26. Special Topics11m

9. International Trade

Exporting and Importing

Macroeconomics

9. International Trade

Exporting and Importing

Previous problem

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Multiple Choice

A nation practicing autarky has a domestic price of extremely tight pants that is lower than the world price. If the nation opened up trade,

It would become an extremely tight pants exporter because the nation has a comparative advantage in producing extremely tight pants.

t would become an extremely tight pants importer because the nation has a comparative advantage in producing extremely tight pants.

It would become an extremely tight pants exporter because the nation does not have a comparative advantage in producing extremely tight pants.

It would become an extremely tight pants importer because the nation does not have a comparative advantage in producing extremely tight pants.

Previous problem

Verified step by step guidance

Understand the concept of autarky: Autarky is a situation where a nation is self-sufficient and does not engage in international trade. The domestic price of goods is determined by domestic supply and demand.

Identify the domestic price relative to the world price: In this scenario, the domestic price of extremely tight pants is lower than the world price, indicating that the nation can produce these pants more cheaply than the rest of the world.

Determine comparative advantage: A nation has a comparative advantage in producing a good if it can produce it at a lower opportunity cost than other nations. The lower domestic price suggests a comparative advantage in producing extremely tight pants.

Predict the trade outcome: When a nation opens up to trade, it will export goods for which it has a comparative advantage. Since the domestic price is lower than the world price, the nation will likely export extremely tight pants.

Conclude the analysis: The nation would become an exporter of extremely tight pants because it has a comparative advantage in producing them, as indicated by the lower domestic price compared to the world price.