is any one good econimics?..y trade is importnat?

Question

why do you think trade is important and what are the necessary conditions for two countries to engage in trading?.........i have this questionin my assignment and i want some suggetions from you guys...and thanx

Answer 1

Trade is important because counrties that trade can consume outside of their production possibilities frontier.

For example, say country A can produce 2 computers an hour or it can produce 4 TVs an hour. Country B can produce 3 computers an hour or 1 TV an hour. Also, for this example, lets say each country works three hours.

Country A without trading could put 3 hours of work into making 12 TVs. Option two would be to put 1 hour into producing 2 computers and 2 hours into producing 8 TVs. Option three would be to put 2 hours into producing 4 computers and 1 hour into producing 4 TVs. Option four would be to put 3 hours into producing 6 computers. Now make a graph of this and this is called the production possibilities frontier(ppf).
Now do the same for Country B. If you are confused, the points would be (9,0), (6,1),(3,2) and (0,3)

Now if they decide to trade they could consume outside of their respective ppf. For example, Country A decides to put 3 hours into making 12 TVs. Country B deicides to put 3 hours into making 9 computers. Country A trades 2 TVs to Country B for 2 computers. Now if you plot these points you should get for Country A (2,10) and for Counrty B (7,2). You should notice that these points are outside of their production possibilities frontier which means they can consume more than if they decided not to trade. Trade allows countries to specialize in what they are good at producing. Country A is good at making TVs and they are able to put all of their work into making TVs with trade.

The necessary condition in order for two countries to engage in trading is the existence of comparative advantage in production. Comparative advantage is being able to produce more with less work compared to another country. In this example, Country A had a comparative advantage in the production of TVs. Country A had a 4 to 1 ratio compare to Country B. It could produce 4 units of TVs in the same time that Country B could produce 1 unit of TV.

Answer 2

Trade between countries is just a bigger example of trade between
people / companies within a city or within a country. Why is trade good between people in an given area? The answer to that is the same at the anwser to trade between countries.

Trade allows for economies of scale, specialization, distribution of natural resources, etc.

Answer 3

Trade is important because not every country is self contained and need to out-source for their economy to keep growing.

Two countries need to have diplomatic relations, also they need to have something to trade to each other.. example one country needs crude oil, and the other needs other materials. If one country has what the other country needs they will trade. It isn't always just materials, it can be services too. One country might have goods to trade for services to help build a dam for irrigation for local farms for example.

Hope that helps.

Answer 4

without giving a too low ball, or too technical answer like most people have.

Trade allows people to be better off, than without trade. Either by attaining new products, or getting more of existing products (through specialisation.

Different countries or people have different skill sets.

Answer 5

“When goods do not cross borders, soldiers will.”
Frederic Bastiat

Can you think of any major/minor wars that have occurred between countries (really citizens) that engage in trade. It brings about peaceful relations.
That is just one reason.

Good Luck

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Answer 6

So if absolutely everyone is attentive to that is area of the NTC, then what's there to argue over? The GM knew which could ensue and gave out the NTC besides...i do not see the project... do not supply the NTC out except you're keen to take that danger, user-friendly as that... not that i imagine what he did replaced into proper, yet he can do it because the alternative replaced into given to him... Oh and to respond to the question- sure, that is what they could do. yet when it does stay a similar, possibly human beings will imagine two times now about giving out NTC's to absolutely everyone...

Answer 7

Trade is almost as important as good spelling and grammar. I hope you are not in college.