Unit 4.1 - Benefits of International Trade
What you need to know and understand:
Key concepts:
Concepts to understand:
- Benefits of international trade, including:
- increased competition
- lower prices
- greater choice
- acquisition of resources
- more foreign exchange earnings
- access to larger markets
- economies of scale
- more efficient resource allocation
- more efficient production
- Absolute and comparative advantage [HL only]
- Gains from trade
- Sources of comparative advantage
- Opportunity costs
- Limitations of the theory of comparative advantage [HL only]
Key concepts:
- Scarcity
- Choice
- Efficiency
- Equity
- Economic well-being
- Sustainability
- Change
- Interdependence
- Intervention
Concepts to understand:
- The increased interdependence of economies has benefits and costs.
- Increased economic integration may result in efficiency, welfare gains and improvements in economic well-being but the benefits may not result in equity.
TEXTBOOK unit 4.1
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Check out this newspaper article:
http://www.bbc.com/news/business-37415202
http://www.pbs.org/wgbh/pages/frontline/shows/walmart/china/trade.html
http://www.bbc.com/news/business-37415202
http://www.pbs.org/wgbh/pages/frontline/shows/walmart/china/trade.html