The Impression After Reading The CHOICE
The CHOICE, written by Russell Roberts, used fictional story to express that free trade is beneficial to America and all other nations. By editing his three edition, Roberts points out his opposing view that China and India pose economic threat to Americans’ standard of living under free trade to alleviate current fears. Roberts further explains the statement through comparative advantage, Roundabout way to wealth, supply and demand, tariff and quota, and etc. to convince readers to support free trade instead of “fair trade”.
To begin with, Roberts illustrates the theory of comparative advantage between USA and Japan on trade between drugs and televisions. America has efficient technology to produce drugs and exports them to Japan to gain yen. Then, with yen on hand, America is able to import cheap televisions from Japan. Roberts uses phrase on this phenomena as “the Roundabout way to wealth” which can benefit both countries during …show more content…
In the predicting situation with 25$ tariff on each television import, the supply of foreign television will go down first. The scarce of television in American market will then lead the domestic price of television increasing until it reach to 25$ above its original prices (27). According to the textbook, the simple graph with a vertical upward sloping line and a vertical downward sloping line resembles the supply and demand in the market by eliminating other effects. It is intuitive to forecast the shift on prices and quantities when the demand curve or supply curve shifts leftward or rightward. To explain the case in the CHOICE, the supply of television shift leftward due to fall in foreign producers, so the price increases and quantity decreases. Overall, the textbook provides more clear observation on supply and demand curve for students to understand the description in the
The CHOICE, written by Russell Roberts, used fictional story to express that free trade is beneficial to America and all other nations. By editing his three edition, Roberts points out his opposing view that China and India pose economic threat to Americans’ standard of living under free trade to alleviate current fears. Roberts further explains the statement through comparative advantage, Roundabout way to wealth, supply and demand, tariff and quota, and etc. to convince readers to support free trade instead of “fair trade”.
To begin with, Roberts illustrates the theory of comparative advantage between USA and Japan on trade between drugs and televisions. America has efficient technology to produce drugs and exports them to Japan to gain yen. Then, with yen on hand, America is able to import cheap televisions from Japan. Roberts uses phrase on this phenomena as “the Roundabout way to wealth” which can benefit both countries during …show more content…
In the predicting situation with 25$ tariff on each television import, the supply of foreign television will go down first. The scarce of television in American market will then lead the domestic price of television increasing until it reach to 25$ above its original prices (27). According to the textbook, the simple graph with a vertical upward sloping line and a vertical downward sloping line resembles the supply and demand in the market by eliminating other effects. It is intuitive to forecast the shift on prices and quantities when the demand curve or supply curve shifts leftward or rightward. To explain the case in the CHOICE, the supply of television shift leftward due to fall in foreign producers, so the price increases and quantity decreases. Overall, the textbook provides more clear observation on supply and demand curve for students to understand the description in the