Economics 9708 · AS & A Level · International trade and free trade

International trade and free trade — practice question

(a)[8]

In a world with two countries, one nation may produce one product more efficiently, while the other nation may produce a different product more efficiently. Explain why specialisation and trade usually bring gains to both countries.

(b)[12]

Suppose one country were more efficient at producing both goods. Discuss whether specialisation and trade would always be beneficial for both countries.

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