million people living there, and each would benefit by $200 from this smoking ban. However, there are

two large tobacco companies in Tobaccoville and the ban would cost them $5 million each. What are the

proposed policy's total costs and benefits? Do you think it will pass?

Access for free at openstax.org
International Trade

19

FIGURE 19.1 Apple or Samsung iPhone? While the iPhone is readily recognized as an Apple product, many

versions (including recently released offerings) have key components made by rival phone-maker, Samsung. In

international trade, there are often “conflicts” like this as each country or company focuses on what it does best.

(Credit: modification of “iPhone 4's Retina Display v.s. iPhone 3G” by Yutaka Tsutano/Flickr Creative Commons, CC

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

•
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