The International Economy (AQA A-Level Economics): Flashcards

Producing more output with same resources than another country

Opportunity cost - lowest opportunity cost = comparative advantage

Economies of scale and lower costs from longer production runs

Transport costs must not exceed output gains from specialisation

Each country must want to consume goods produced by the other

Where absolute advantage greatest vs where disadvantage smallest

Producing better quality goods at lower costs than rivals

Tax on imported goods that raises their price

Factors of production fixed, cannot move between countries

Soil erosion, pest vulnerability, declining future yields