Test bank Questions and Answers of Chapter 9: Comparative Advantage and the Gains From International Trade The Classical Method: Jacob Viner points out that the classical economists followed three different methods or criteria for measuring the gains from international trade: (1) differences in comparative costs; (2) increase in the level of national income; and (3) the terms of trade. when a country,firm, or individual concentrates production on one or a few G&S, increased size of firm/corporation (MNC's) leads to increased economies of scale, increased competition and efficiency of firms leads to lower prices, increased variety of Q&Q of G&S for domestic consumers, countries vary in resources needed for production of value added goods, trade facilitates movement of ideas & technology from one country to another, this leads to increased efficiency, lower prices for consumers, and higher quality and variety of G&S, trade allows for foreign exchange of currencies, increased specialization, acquisition of needed resources, increased competition, technological advances and expanding markets increase domestic output, reduces the possibility of hostilities and violence, free trade allows for countries that are best at producing certain G&S to produce them which allows for efficient allocation of resources.   Economists have studied free trade extensively and although it creates winners and losers, the main consensus is that free trade generates a large net gain for society. A. Created by. It can also help increase your company's credibility, both abroad and at home. Free trade price below both autarky prices. International markets can open up avenues for a new line of service or products. In a 2006 survey of American economists, it was found that 85.7% believed that the U.S. should eliminate any remaining tariffs and trade barriers. Start studying Gains from International Trade. Free international trade can increase the availability of all goods and services in all the countries that participate in it. (1962), "The Gains from International Trade Once Again," The Economic Journal 72, pp. I. 820-829. Movement of labor from a Foreign country to the domestic (Home) C. increases the marginal product of labor in Foreign. 11/8/2020 Chapter 2 Online marketing Flashcards | Quizlet 5/24 economy A. In a two-country, two-product world, the … International trade has flourished over the years due to the many benefits it has offered to different countries across the globe. The international terms of trade rises above the nation's autarky price Learn vocabulary, terms, and more with flashcards, games, and other study tools. US & Japan’s PPF-Consumption w/o trade … Economists have adopted various methods to measure the gains from international trade which are explained as under: 1. 39. ADVERTISEMENTS: Some of the important factors that determine the gains from international trade are as follows: 1. Jhingan, “International Economics” Konark Publication, New Delhi. PLAY. M. C. Kemp, “The Gains from Trade and the Gains from Aid: Essays in International Trade Theory” Routledge. Some countries have more natural resources than others, have different quality of labour, capital and levels of technology. Jain, O.P. Samuelson, Paul A. 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