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Economics- international trade and globalization

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Course
Economics

Institution

Book
Cambridge IGCSE® and O Level Economics Coursebook

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...

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Uploaded on November 14, 2022
Number of pages 7
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econ
economics
igcse
cambridge
disadva
internation specialization
international trade and globalization
specialisation of countries nationally
importance of specialization
advantages of specialization

Book Title:Cambridge IGCSE® and O Level Economics Coursebook

Author(s):Susan Grant

Edition:2018
ISBN:9781108440387
Edition:Unknown

Thesis
Economics:- Factors Of Production
Summary
Cambridge economics OPPORTUNITY COST In-detail, summarized notes.
Book review
Market structure

Institution Secondary school
Economics
School year 4

CA$9.06

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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

where market
↳
process the world is becoming one

↳
greater interconnection between countries are :

reduced transport costs efficient ships trains container isation
•
:
, planes , ,

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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