chapter 36- international specialization, mentions the definition, importance, why it’s common, advantages of specialization at a national level, disadvantages of specialization at a national level, absolute advantage, comparative advantage, specialization and international trade, international t...
Chapter 36 : international specialisation
-
specialisation : when nations concentrate it 's productive efforts on producing a limited variety of goods / services in which
they 're efficient 4 productive at & have an advantage over other economies in
↳ determined on either resource allocation or costs of
production
-
importance of specialisation :
↳
there's limited supply so products are made by 1 skilled worker to specialise in 1
since
type of product
L
specialisation is now common cuz :
↳ specialised machinery 4 technologies are now available
↳ increased competition = costs low
↳
high living standards is from specialisation
↳ if a product can be produced at a low cost , they can choose to allocate all their resources to said product
-
advantages of specialization at national level :
↳ economies of scale and efficiency
↳
job creation
'
↳ national specialisation = international trade so other countries goods can be imported = increase choice
↳ revenue to the government
→
improves living standards
L
disadvantages of specialization at national level :
to
↳
danger of unemployment -
more specialisation ,
less demand for old products so
they're unemployed
↳ over -
exploitation of resources
↳ negative externalities / social cost -
external costs like
damage to environment
absolute
✓
advantage :
↳ producing more
output with less resources
✓
comparative advantage :
and both benefit from international trade if country is
↳ when
producing at a low opportunity cost countries can even a
better at producing than the other
u
specialising & international trade :
↳
producing narrow range of products make it so that countries have to export to gain revenue for import spending s citizens
want .
L
difference between international 4 internal trade :
↳ international trade : trade between countries
↳ internal trade : trade within the country
wider market ,
↳ benefits of int .
: take advantage of economies of scale
,
source
products from wider area ,
higher profits
↳ disad .
of int .
: national boundaries ,
different languages cultural differences ,
trade restrictions more competition , foreign
, ,
currencies .
, Chapter 37 : free trade and production
globalisation which the world increasingly interconnected through trade & other links
process by becoming
✓ : is
advances in communications :
purchase products online keeps in touch w other countries
•
,
•
removal of some trade restrictions : trend for tariffs and quotas to be reduced
L
consequences of
globalisation :
↳ ↑ competition
'
↑ product range at
↳ consumers low
prices
↳ relocate production for efficiency
↳ makes economies more able to
experience external shock
↳ ↑ recession ↑
in one
economy =
impact on other economies
↳
gov policy is constrained globalisation
.
by
↳ structural unemployment
L
MNCS :
↳ business organisation that produces in more than one country
↳ benefits : increase employment , output , tax revenue
,
new technology ,
management ideas ,
infrastructure development
limitations more countries have domestic businesses
↳ : prone to
polluting they plants ,
drives out of business , profits
earned may be paid to shareholders in home country
methods of
protection
L :
'
↳ tariff : tax imposed on imported products ,
sometimes used to raise governments revenue but
usually to
discourage purchase imports
↳
quota : limit
placed on amounts of goods produced
↳
embargo : import of product may be banned f demerit goods )
↳ exchange control :
gov Can to
stop households & firms from buying imports by restricting foreign currency
.
try
↳ quality standards :
set artificially high standards .
L reasons for and consequences of protection :
↳
protection if infant industries / sunrise industries ( new industries w
relatively low output and high cost
industries /sunst industries (
↳
protection of declining old industries that are
going out of business ) protect for workers to
find new jobs first
↳ protection of
strategic industries : industries considered important for the survival or
development of the
country ; govs
protect agriculture 4 industries for consistent supply
'
defence
↳
raising employment and improving the trade position : ↓ imports :
expand domestic firms and ↑ workers
↳
protection of industries from low wage competition wages
: low
≠ low production costs
,
if low wages but ↓ productivity ,
↑ ↓ ↑ ↑
production costs ,
if wages 4 costs
,
demand =
wages
↳
protection of industries from dumping : selling products below production costs
industries from forms of unfair foreign competition foreign firms successful sets
↳
protecting other : since are more
,
it
an unfair advantage for domestic firms
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