International trade

Question 1

trade helps us to

Answer 1

-better satisfies needs and wants
-increases production, income and consumption

Question 2

how do nations gain from international trade

Answer 2

-allows coutnries to acess resources they would not be able to normally
-allows a nation to specialise in the production or have a compartivie cost advantgae
-allows markets to sell on a larger scale and gain larger scale production
-increases exports
-increases consumer choice
-exposes local businesses to competition improving effeciency

Question 3

Absolute cost advantage

Answer 3

occurs if a nation is the cheapest or most effecient producer of a single g/s in the world

Question 4

comparitive cost advantage

Answer 4

occurs if a nation specialises in a few key areas of production where its cost advantages are greatest, and its disadvatages are lowest.