What is explanation of intra-industry trade?
Intra-industry trade refers to the exchange of similar products belonging to the same industry. The term is usually applied to international trade, where the same types of goods or services are both imported and exported.
What is intra-industry trade theory and its features?
Intra-industry trade represents international trade within industries rather than between industries. Such trade is more beneficial than inter-industry trade because it stimulates innovation and exploits economies of scale. Intra-industry trade occurs when a country exports and imports goods in the same industry.
What are the types of intra-industry trade?
a) Trade in similar products (“horizontal trade”) with differentiated varieties (e.g. cars of a similar class and price range). b) Trade in “vertically differentiated” products distinguished by quality and price (e.g. exports of high-quality clothing and imports of lower-quality clothing).
What are some major determinants of intra-industry trade?
Intra-industry trade usually will takes place in the countries that have similar social structure and economical. Meanwhile, the key factors that affecting intra-industry trade are product differentiation, human capital intensity and economies of scale (Hu & Ma, 1999).
What is Intradustries trade quizlet?
Intraindustry trade. international trade that occurs when a country exports and imports goods within the same industry or product group.
Which of the following accurately defines intra-industry trade?
Thus, long-run average costs of production decrease. Which of the following accurately defines inter-industry trade? The exchange of products of similar industries is called intra-industry trade, whereas the exchange of products of different industries is called inter-industry trade.
What is intra-industry trade discuss its measurement and causes?
Intra-Industry Trade: Measurement, Determinants and Growth – A Study of Swedish Foreign Trade. The purpose of this book is to explain why intra-industry trade – simultaneous export and import of products produced within the same industry – arises and to find out what factors influence its size.
How is intra-industry trade measured?
The size of intra-industry trade is measured by using Grubel and Lloyd’s index, i.e., the share of intra-industry trade in total trade (IIT). The more extreme an industry is with regard to factor intensity, i.e., if an industry is very capital or very labor intensive, the smaller IIT is in that industry.
What is the benefit of economies of scale in intra industry trade quizlet?
International trade occurs because economies of scale make a comparative advantage. more firms give rise to more intense competition, and hence a lower price.
Which of the following would be expected if the tariff on foreign produced automobiles were increased?
Which of the following would be expected if the tariff on foreign-produced automobiles were increased? The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise. The number of unemployed workers in the domestic automobile industry would rise.