BY 2.0)

CHAPTER OBJECTIVES

In this chapter, you will learn about:

• Absolute and Comparative Advantage

• What Happens When a Country Has an Absolute Advantage in All Goods

•

Intra-industry Trade between Similar Economies

• The Benefits of Reducing Barriers to International Trade

Introduction to International Trade

BRING IT HOME

Just Whose iPhone Is It?
The iPhone is a global product. Apple does not manufacture the iPhone components, nor does it assemble them.

The assembly is done by Foxconn Corporation, a Taiwanese company, at its factories in China and India. But,

Samsung, the electronics firm and competitor to Apple, actually supplies many of the parts that make up an iPhone.

In earlier models, Samsung parts made up as much as 26% of the total costs of production. And in more recent

versions, Samsung manufactures the displays and cameras. In some ways, then, Samsung is both the biggest
450 19 • International Trade
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