28 : International Trade

Question 1

What are the three main reasons why specialization increases total output

Answer 1

• Workers don’t switch between stalks se time is saved

• More & better machinery is employed aka capital widening

• Practice makes workers more efficient & productive

Question 2

What is absalute advantage

Answer 2

Is the ability to produce more using fewer resources than any other
country/region

Question 3

What is comparative advantage

Answer 3

• This is what the country gives up when it increases production within one industry.

The country that gives up the least of the other commodity has the comparative advantage