International Trade Theories and Models

This assignment provides an in-depth analysis of international trade theories, including Adam Smith's theory of absolute advantage, Ricardo's comparative advantage, Heckscher-Ohlin model, and Krugman's new trade theory. The discussion covers how these theories explain the allocation of scarce resources globally, highlighting the benefits of increasing return to scale and specialization based on factor endowment. Additionally, it touches on intra-industry trade, Porter's diamond trade model, and the implications of firms in international trade for policy-making.