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? 2007 Thomson South-Western;Application: International Trade;Application: International Trade;Application: International Trade;THE DETERMINANTS OF TRADE;Figure 1 The Equilibrium without International Trade;The Equilibrium Without Trade;The World Price and Comparative Advantage;The World Price and Comparative Advantage;The World Price and Comparative Advantage ;Figure 2 International Trade in an Exporting Country;Figure 2 International Trade in an Exporting Country;Figure 2 International Trade in an Exporting Country;How Free Trade Affects Welfare in an Exporting Country;THE WINNERS AND LOSERS FROM TRADE;The Gains and Losses of an Importing Country ;Figure 3 International Trade in an Importing Country;Figure 3 International Trade in an Importing Country;Figure 3 International Trade in an Importing Country;How Free Trade Affects Welfare in an Importing Country;The Gains and Losses of an Importing Country;THE WINNERS AND LOSERS FROM TRADE;The Effects of a Tariff;Figure 4 The Effects of a Tariff;Figure 4 The Effects of a Tariff;Figure 4 The Effects of a Tariff;Figure 4 The Effects of a Tariff;Figure 4 The Effects of a Tariff;Figure 4 The Effects of a Tariff;The Effects of a Tariff;The Effects of a Tariff;FYI: Import Quotas: Another Way to Restrict Trade;The Effects of an Import Quota;The Effects of an Import Quota;The Effects of an Import Quota;FYI: Import Quotas: Another Way to Restrict Trade;The Lessons for Trade Policy;The Lessons for Trade Policy ;The Lessons for Trade Policy ;THE ARGUMENTS FOR RESTRICTING TRADE;CASE STUDY: Trade Agreements and the World Trade Organization;CASE STUDY: Trade Agreements and the World Trade Organization;CASE STUDY: Trade Agreements and the World Trade Organization;The effects of free trade can be determined by comparing the domestic price without trade to the world price.
A low domestic price indicates that the country has a comparative advantage in producing the good and that the country will become an exporter.
A high domestic pric
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