What limits international trade?
Limited intl. mobility of goods, factors, technology
natural reasons
government policies / Governments have ability to restrict intl. trade
Limits to enforceability of intl. contracts
How is the price of a good important in the creation of trade?
countries trade, if the price differs by more than the transport cost
What are the general gains and losses from free trade?
Why do countries trade?
price differences
supply and demand in partial equilibrium
determinants of prices
Explain the Family Tree of Trade Models:
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