Questions:
1) Evaluate the following statement: Comparative advantage will benefit all people because everyone has a comparative advantage in something. Therefore, trade based on comparative advantage should be facilitated without undue government intervention.
2) What factors influence a firm's competitive strategies? How does global economic competition affect the price elasticity in the domestic market and decisions related to the strategy a firm uses to compete? Why do most economists oppose trade restrictions? Who have been the winners and losers as a result of the North American Free Trade Agreement? Explain your answer.
3) How does comparative advantage influence the competitive strategies of firms?
4) What is Production Possibility Curve?
5) Adam Smith envisioned a highly integrated economy and railed against barriers to free trade. In England, where mercantilism was the economic system of Smith's time, he called those who smuggled goods illegally into the country hero's. How does merchantilism and capitalism differ? Especially with regards to trade?
6) What are four reasons why economists and laypeople's view of trade differ?