Author Question: Why is the net gain from international trade positive? What will be an ideal ... (Read 96 times)

Tirant22 · **on:** Jun 29, 2018

Why is the net gain from international trade positive?

What will be an ideal response?

Question 2

How is the gain from exports distributed between consumers and domestic producers?

What will be an ideal response?

manuelcastillo · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The net gain from international trade is positive because the gain to the winners exceeds the losses to the losers. For instance, in the case of an imported good, the gain to consumers exceeds the loss to producer so society gains on net. The situation is similar for exports: The gain to producers exceeds the loss to consumers..

Answer to Question 2

Consumers lose from exports and domestic producers gain from exports.