Th4.1: Factors Influencing Pattern of Trade - Comparative Advantage

Question 1

When will countries trade?

Answer 1

when there is a comparative advantage to trading

Question 2

What will a change in the comparative advantage affect?

Answer 2

the trade pattern

Question 3

Why has there been a recent growth in the exports of manufactured goods from developing countries to developed countries?

Answer 3

developing countries have gained an advantage in the production of manufactured goods, due to their low labour costs, so production shifted abroad

Question 4

The deindustrialisation of the UK has meant that…

Answer 4

the manufacturing sector has declined - meaning that production of manufactured goods has shifted to other countries, such as China, whilst the UK focuses more on services, such as finance

Question 5

China and India have become industrialised, meaning…

Answer 5

their share of the world trade has risen

the volume of manufactured goods that they export has increased

Question 6

However, why has China’s wage competitiveness fallen?

Answer 6

since their population is now ageing and due to the rise of middle class who demand higher wages and consume more