International trade often has strong effects on the...?
distribution of income within countries, so it often produces losers as well as winners
What are the two reasons why income distribution effects arise?
1) Factors of production cannot move instantaneously and costlessly from one industry to another 2)the changes in an economy's output mix have differential effects on the defferential effects on the demand for different factors of production
What is a useful model of [income distribution effects] of international trade?
the specific-factors model
In the Specific-factors model, differences in resources can cause countries to...?
have different [relative supply curves] and thus cause international trade
In the Specific-Factors model, factors specific to [export sectors] in each country...?
gain from trade
In the Specific-Factors model, factors specific to [import-competing] sectors....?
lose from trade
In the Specific-Factors model, what is true about Mobile factors that can work in either sector?