Need some help in my discussion question for ECON1101... (1 Viewer)

[snake1224]

Hello everyone. As you all probably already know, all of us have to do a discussion question with a presentation for it.

Mine is Question 2, and I need some help... Here's the question:

"Use the theory of comparative advantage to explain why economists are generally in favour of "Free Trade".
What conditions are necessary for the gains from trade and specialisation to be realised?
What factors determine the distribution of the gains from trade?"

The first part ("why economists are in favour of free trade") is still quite easy. However I don't really get what the second and last part want. While I'm already really familiar with this topic with all my reading, I don't really know what I should talk about for these 2 parts.


I'm hoping someone can just tell me generally what I need to talk about for those 2 parts.

EDIT: For part 2, do you think if I use an example to show how trading increases total outputs would be appropriate to show the "conditions"? I'm not sure...
Also, for part 3, I'm not sure about what "distribution of the gains" means... does it have anything to do with how they determine the term of trade?

Thanks~

 

[Jago]

This sounds like the kind of question you should ask in webct.

 

[snake1224]

This sounds like the kind of question you should ask in webct.

Oh I didn't know you can ask questions in webct... (I must've been sleeping when they talked about it lol)

Can you please tell me where I can ask questions in webct? Thanks

 

[cyl123]

hey basically the first part talks about the theory of comparative advantage and how it favours trade THEORETICALLY

i think second part is more based on real world situation and under what conditions will both nations agree to trade (where terms of trade is less than opportunity cost of production etc.)

for third part... um.... i think "distribution of gains" means how increased output from specialisation is distributed. Terms of trade obviously comes to mind when distributing output through trade. Do an example on how differing terms of trade affects distribution of gains. Of course in the real world, not all countries hold equal economic and market power so that can influence terms of trade.