Intro to International Trade
- Created by: evystewart
- Created on: 17-02-21 23:10
Chapter 21 - Why do countries trade?
International trade is the exchange of goods and services betwee countries.
The gains from international trade:
1. Lower prices
- the ability to buy goods and services from other countries for a lower price
- different prices caused by access to natural resources, quality of capital, quality of labour force, or level of technology
- this is the main gain from international trade
2. Greater choice
- consumers can choose from products that may only be produced in other countries
3. Differences in resources
- countries can buy resources that they need but don't naturally posess
- resources may be used to produce other products or simply for survival
4. Economies of scale
- international trade causes the size of the market (and therefore demand) to increase
- level of production and size of production units will also increase allowing economies of scale…
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