How many of you have received flowers for Valentine's Day? Of course, February in New England is snowy, and those flowers are not raised locally—they are imported from other countries. International trade is hugely important in national and international economies today, but up to this point it has been excluded from our models. In this lecture, a basic introduction to the principles of international trade is provided.
Roses you receive on Valentine’s Day may have been imported from another country as a product of international trade. Image courtesy of ntknicole on Flickr.
Keywords: International trade; comparative advantage; specialization; autarky; tariffs; free trade.
Before watching the lecture video, read the course textbook for an introduction to the material covered in this session:
- [R&T] Chapter 17, "International Trade."
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- Comparative Advantage: The Market for Roses (00:17:13)
Comparative Advantage: The Market for Roses
- Sources of Comparative Advantage (00:04:46)
Sources of Comparative Advantage
- Impact of International Trade on Welfare (00:07:34)
Impact of International Trade on Welfare
- Trade Restrictions: Tariffs (00:07:56)
Trade Restrictions: Tariffs
- The Argument for Free Trade (00:08:09)
The Argument for Free Trade
This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session. Complete this quiz before moving on to the next session to make sure you understand the concepts required to solve the mathematical and graphical problems that are the basis of this course.
These optional resources are provided for students that wish to explore this topic more fully.
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|14.54 International Trade, Fall 2006.||MIT OpenCourseWare||An in-depth course on game theory.|