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A* summary on specialization and trade £7.49   Add to cart
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  2.  
  3. PEARSON (PEARSON)
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  5. Economics A
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  7. Unit 4 - A global perspective

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A* summary on specialization and trade
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EXAM IS COMING!!!!! This is everything you need for this topic! I got A* studying this, soooooo it will probably reduce your time and effort to find a tutor and it will be more beneficial than your class notes!!! Check out for other summaries in my uploads.

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  • Theme 4
  • January 20, 2023
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  • 2022/2023
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1.1.2 Specialization and trade (Ricardo)
a) Absolute and comparative advantage
Absolute advantage: Where a country can produce more than another country of a
good given the same amount of resources
Comparative advantage: Where a country can produce more of one good at a lower
o/c than another country




~End up increasing global output, allow you to produce above PPF


*output -人地除自己(have CA geh pt dun move)
*input - 自己除人地
*autarky = no trade at all

Assumptions and limitations:
Assumptions Limitations
1. AC remains constant (no EOS/DOS) Increase specialization leads to DOS (=
AC rises)
2. No trade barriers Pay tariff which increase costs OR quota
which doesn’t allow u to sell so much
3. No transport costs In reality very expensive which increase
costs (costs increases as u ship more)
4. No externalities

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