{"id":3766,"date":"2023-10-05T18:47:46","date_gmt":"2023-10-05T18:47:46","guid":{"rendered":"http:\/\/localhost\/ecole9ja\/?p=3766"},"modified":"2023-10-05T18:48:41","modified_gmt":"2023-10-05T18:48:41","slug":"week-9-ss3-first-term-economics-notes","status":"publish","type":"post","link":"https:\/\/ecolebooks.com\/nigeria\/posts\/week-9-ss3-first-term-economics-notes\/","title":{"rendered":"Week 9 – SS3 First Term Economics Notes"},"content":{"rendered":"

\u00a0WEEK NINE
\n<\/strong>INTERNATIONAL TRADE II
\n<\/strong>CONTENT
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Advantages and disadvantages of international trade.
\n2.\u00a0\u00a0\u00a0\u00a0The law of comparative (cost) advantage.
\n3.\u00a0\u00a0\u00a0\u00a0Instruments of trade protection.
\n4.\u00a0\u00a0\u00a0\u00a0Reasons for trade protection.<\/p>\n

\u00a0International trade has enormous advantages among which are:
\n1.\u00a0\u00a0\u00a0\u00a0International trade generates the exchange of goods and services among the nations of the world to mutual advantages of all participating countries.
\n2.\u00a0\u00a0\u00a0\u00a0Promotion of economic development.
\n3.\u00a0\u00a0\u00a0\u00a0International trade provides employment opportunities.
\n4.\u00a0\u00a0\u00a0\u00a0It enhances international specialization.
\n5.\u00a0\u00a0\u00a0\u00a0It leads to increase in world output.
\n6.\u00a0\u00a0\u00a0\u00a0International trade promotes friendship among nations of the world.
\n7.\u00a0\u00a0\u00a0\u00a0International trade increases the standard of living.
\n8.\u00a0\u00a0\u00a0\u00a0It fosters \u2013 equitable distribution of national resources.
\n9.\u00a0\u00a0\u00a0\u00a0Countries are able to acquire skills and ideas.<\/p>\n

\u00a0DISADVANTAGES OF INTERNATIONAL TRADE
\n1.\u00a0\u00a0\u00a0\u00a0International trade can lead to dumping of goods into less developed countries by multinational companies from the developed nations.
\n2.\u00a0\u00a0\u00a0\u00a0This development above affects infant industries adversely.
\n3.\u00a0\u00a0\u00a0\u00a0International trade if not checked can destroy the cultural values of a country. E.g use of mini skirt from America is anti-cultural and against our social norms.
\n4.\u00a0\u00a0\u00a0\u00a0Through international trade, harmful or dangerous goods can be imported into a country by unscrupulous business men.
\n5.\u00a0\u00a0\u00a0\u00a0Deficit may arise, which affects the country adversely.
\n6.\u00a0\u00a0\u00a0\u00a0Where dumping is highly prevalent, it may lead to unemployment.
\n7.\u00a0\u00a0\u00a0\u00a0Reduction of effort to attain self-reliance.
\n8.\u00a0\u00a0\u00a0\u00a0The developed countries may use their position to exploit the less developed ones.<\/p>\n

\u00a0EVALUATION
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0State five advantages of International Trade.
\n2.\u00a0\u00a0\u00a0\u00a0Give four arguments against International Trade<\/p>\n

\u00a0LAW OF COMPARATIVE COST ADVANTAGE
\nThe theory or principle of comparative cost advantage states that countries derive mutual benefit from trade when they specialize in the production of those commodities in which they have greatest comparative cost advantage over others and exchange them for other commodities which have comparative cost disadvantage.<\/p>\n

\u00a0A country has a comparative advantage over others in the production of a commodity in which it has the lowest opportunity cost than others. Therefore, it is the real cost of producing a commodity (in terms of other commodities forgone) that is taken into consideration. This theory was propounded by David Ricardo in the 19th century.<\/p>\n

\u00a0ASSUMPTIONS OF THE PRINCIPLE OF COMPARATIVE COST ADVANTAGE
\nThis principle or theory is based on the following assumptions:
\n1.\u00a0\u00a0\u00a0\u00a0There are only two countries.
\n2.\u00a0\u00a0\u00a0\u00a0Only two items are produced with the available resources.
\n3.\u00a0\u00a0\u00a0\u00a0There is free flow and mobility of factors of production.
\n4.\u00a0\u00a0\u00a0\u00a0There is no transport cost
\n5.\u00a0\u00a0\u00a0\u00a0Constant costs prevail.
\n6.\u00a0\u00a0\u00a0\u00a0Technology is constant.
\n7.\u00a0\u00a0\u00a0\u00a0Labour is the only factor of production.<\/p>\n

\u00a0In line with the above assumptions, Nigeria and the United States of America (USA) for example, are producing and consuming rice and wheat. The pre-specialisation production position is shown in schedule A below.<\/p>\n

\u00a0Schedule A\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Rice\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Wheat
\nNigeria\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0100 bags\u00a0\u00a0\u00a0\u00a050 bags
\nUSA\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a050 bags\u00a0\u00a0\u00a0\u00a0100 bags
\nTOTAL\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0150 bags\u00a0\u00a0\u00a0\u00a0150 bags<\/p>\n

\u00a0Schedule B is an estimated opportunity cost of producing the two commodities by the two nations.<\/p>\n

\u00a0Schedule B
\nRice\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Wheat
\nNigeria 50 = \u00bd i.e.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0100 = 2 i.e.<\/p>\n

    \n
  1. 50\n<\/li>\n<\/ol>\n

    \u00a01 bag of rice = \u00bd \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01 bag of wheat
    \nbag of wheat\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0bags of rice<\/p>\n

    \u00a0Rice\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Wheat
    \nUSA\u00a0\u00a0\u00a0\u00a0100 = \u00bd \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a050 = \u00bd i.e.
    \n\u00a0\u00a0\u00a0\u00a0 50
    \n1 bag of rice 2 bags\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01 bag of wheat \u00bd bag of rice.
    \nof wheat<\/p>\n

    \u00a0By the Law of Comparative Cost Advantage. Nigeria should specialize in the production of rice while USA should specialize in the production of wheat.<\/p>\n

    \u00a0THE PRINCIPLE OF ABSOLUTE ADVANTAGE
    \nThe principle of absolute advantage was propounded by Adam Smith and it states that a country should specialize in the production of a commodity or commodities and services in which it has absolute advantage over other countries. According to Adam Smith, a country has an absolute advantage over other countries if she can produce a commodity or service which other countries cannot produce. Again, given the same unit of resources, a country has absolute advantages where she can produce the two commodities concerned at the least cost.<\/p>\n

    \u00a0EVALUATION
    \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Using the United States of America and Nigeria as an example, show how the two countries will gain by specializing and trading on the basis of the theory of comparative cost advantage (NECO June, 2003).
    \n2.\u00a0\u00a0\u00a0\u00a0Outline five assumptions of the theory of comparative advantage.<\/p>\n

    \u00a0INSTRUMENTS OF TRADE PROTECTION
    \nThe government of any country control or restrict trade through the following instrument.
    \n1.\u00a0\u00a0\u00a0\u00a0Import duties or tariffs: This is a tax imposed on imported goods to reduce the amount of trade.
    \n2.\u00a0\u00a0\u00a0\u00a0Foreign Exchange Control: This is the control that is exercised by the state, and usually through the Central Bank on all dealings, in gold and foreign exchange i.e. foreign currencies.
    \n3.\u00a0\u00a0\u00a0\u00a0Import licensing \u2013 Under import licensing, no commodity may be imported except on the basis of individual licences issued by the government of a country.
    \n4.\u00a0\u00a0\u00a0\u00a0Devaluation \u2013 This is a deliberate reduction in the value of a country’s currency in terms of the values of the currencies of other countries of the trading world. Devaluation is used as a tool of correcting an imbalance in a country’s balance of payments.
    \n5.\u00a0\u00a0\u00a0\u00a0Quota \u2013 An import quota is a quantitative restriction imposed on commodities entering a country for a specified period of time.
    \n6.\u00a0\u00a0\u00a0\u00a0Embargo \u2013 This is the prohibition or outright ban placed on some imported goods.<\/p>\n

    \u00a0REASONS FOR TRADE PROTECTION
    \nThe following points are advanced in support of trade protection.
    \ni.\u00a0\u00a0\u00a0\u00a0Maintenance of full employment at home.
    \nii.\u00a0\u00a0\u00a0\u00a0Protection of infant industries.
    \niii.\u00a0\u00a0\u00a0\u00a0Development of import substitutes at home
    \niv.\u00a0\u00a0\u00a0\u00a0To correct or remove any imbalance in Balance of payment Account.
    \nv.\u00a0\u00a0\u00a0\u00a0To raise revenue e.g. tax
    \nvi.\u00a0\u00a0\u00a0\u00a0Prevention of dumping.
    \nvii.\u00a0\u00a0\u00a0\u00a0Prevention of harmful and non-essential goods.
    \nviii.\u00a0\u00a0\u00a0\u00a0Government may protect trade for strategic reasons \u2013 e.g. in retaliation against a foreign state.<\/p>\n

    \u00a0EVALUATION
    \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0What are the arguments for protection in international trade?
    \n2.\u00a0\u00a0\u00a0\u00a0Mention any five instruments of Trade protection.<\/p>\n

    \u00a0READING ASSIGNMENT
    \n<\/strong><\/p>\n

      \n
    1. Amplified and simplified Economics for SSS by Femi Longe page 401-412.\n<\/li>\n
    2. \n
      Essential Economics for SSS by C E Ande page 378-384.\n<\/div>\n

      \u00a0<\/li>\n<\/ol>\n

      GENERAL EVALUATION
      \n<\/strong><\/p>\n

        \n
      1. What is Crop farming?\n<\/li>\n
      2. Outline any four measures that can be adopted to increase crop production.\n<\/li>\n
      3. Highlight five differences between public limited liability company and private limited liability company.\n<\/li>\n
      4. Define specific duty.\n<\/li>\n
      5. \n
        What is a normal channel of distribution?\n<\/div>\n

        \u00a0WEEKEND ASSIGNMENT
        \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Which of these does not relate to the law of comparative advantage?
        \n\u00a0\u00a0\u00a0\u00a0A. the law of comparative advantage was propounded by David Ricardo B. the law stresses the importance of relative efficiency. C. in order to specialize a country must have absolute advantage D. the principle if followed, should increase total world output.
        \n2.\u00a0\u00a0\u00a0\u00a0Devaluation means\u00a0\u00a0\u00a0\u00a0A. reduction in the value of the national currency B. a reduction in the purchasing power of foreign currencies C. a reduction in the value of domestic currency relative to foreign currencies D. a decrease in the purchasing power of foreign currencies.
        \n3.\u00a0\u00a0\u00a0\u00a0Dumping in economics means the selling of goods in a foreign market \u2026\u2026\u2026\u2026.
        \n\u00a0\u00a0\u00a0\u00a0A. at a price below that received in the home market B. at a price that receive in the home market C. at a price equal to the cost price in the home market D. in order to encourage indigenous producers E. at a price equal to selling price in the home market.
        \n4.\u00a0\u00a0\u00a0\u00a0Foreign Exchange control in Nigeria is enforced by the \u2026\u2026\u2026\u2026.
        \n\u00a0\u00a0\u00a0\u00a0A. Commercial banks B. Merchant banks\u00a0\u00a0\u00a0\u00a0C. Mortgage bank\u00a0\u00a0\u00a0\u00a0D. Central bank
        \n\u00a0\u00a0\u00a0\u00a0E. Agricultural Development Bank
        \n5.\u00a0\u00a0\u00a0\u00a0Exchange Control is a weapon used in regulating \u2026\u2026\u2026\u2026. A. Internal trade\u00a0\u00a0\u00a0\u00a0B. stock exchange\u00a0\u00a0\u00a0\u00a0C. Foreign trade D.barter trade\u00a0\u00a0\u00a0\u00a0E. exchange of per sound property\n<\/li>\n<\/ol>\n

        \u00a0THEORY
        \n<\/strong><\/p>\n

          \n
        1. Why do countries impose restrictions on international trade?\n<\/li>\n
        2. Justify government restriction of trade with foreign countries.\n<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

          \u00a0WEEK NINE INTERNATIONAL TRADE II CONTENT 1.\u00a0\u00a0\u00a0\u00a0Advantages and disadvantages of international trade. 2.\u00a0\u00a0\u00a0\u00a0The law of…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,292],"tags":[],"class_list":["post-3766","post","type-post","status-publish","format-standard","hentry","category-posts","category-first-term-ss3-economics"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3766","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/comments?post=3766"}],"version-history":[{"count":1,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3766\/revisions"}],"predecessor-version":[{"id":3767,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3766\/revisions\/3767"}],"wp:attachment":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/media?parent=3766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/categories?post=3766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/tags?post=3766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}