1.What is the law of comparative advantage, and why is it important in international trade?

2.At one time, it was believed that the way for a nation to prosper was to export as much as possible while importing as little as possible. More money would flow into a country than out of a country. Is this really a sound economic strategy? What is the relationship between exports and imports?

3.Suppose that in the absence of trade, the U.S. price for bicycles was higher than the world price for bicycles. Would allowing international trade, mean that the U.S. would import or export bicycles? Who in the U.S. would benefit and who would lose with a free trade policy, and would the gains be greater than the losses?

4.What are the commonly used arguments for the use of tariffs?

5.How do subsidies distort trade patterns and lead to inefficiencies?