Trade overview of arguments

Question 1

Price elasticity of demand or supply

Answer 1

Percentage change in q demanded or supplied after 1% price increase where >1 is elastic

Question 2

Arbitrage

Answer 2

Buying something in one market and selling in another for profit

Question 3

Mercantilism

Answer 3

Views international trade as beneficial but governments need to regulate through taxes and exports

Question 4

Wealth of nations

Answer 4

Adam smiths theory promoting free trade by comparing it to households —> every househould finds it worthwile to produce some and consume others

Question 5

Absolute advantage

Answer 5

Adam smith; country has absolute advantage when their labor productivity is higher; where labor productivity is output in numbers in 1 hour