Mankiw's Principles of Micrneconomics Chapter 3

1. What surprised you most about the concepts in this chapter?  Why?           

In discussions concerning trade, one controversial issue has been trade between US and China. On one hand, proponents of trade with China argue that the trade relationship between both countries is beneficial. On the other hand, organizations such as our labor unions contend that the consequences of unequal trade, such as resource re-allocation, can damage industries that were once pillars of our economy. In my own view, trade requires both parties to be dependent upon one another. If executed properly, this mutual understanding that trade requires an interrelated dependency can drive a productive relationship.

2. What is your opinion about international trade?  Overall is it good or bad?  Why?

Imagine a world in which you would be solely responsible for producing everything you currently consume (food, books, electronics, cars, gas). I would imagine that at some point you would consider the opportunity cost between consuming a multitude of products and just getting what you needed to survive. The same concept applies to trade.

Assuming there is equality, trade amongst individuals, businesses, and countries benefits all involved. It opens the path to variety and can even out the inadequacies of struggling economies. Prior to introducing trade, a country should determine whether they have the comparative or absolute advantage.