4.7.1 Benefits of International Trade

• What does international trade involve?

  Exchange of goods and services
• International trade fosters closer economic ties between nations through globalization


  True
• What is the example given for specialization in international trade?

  Germany produces high-quality cars
• Steps in the process of international trade based on specialization and comparative advantage:

  1️⃣ Countries specialize in producing goods

  2️⃣ Countries trade goods based on comparative advantage

  3️⃣ Increased productivity and efficiency
• How does international trade increase market size?

  Allows businesses to sell globally
• Globalization is enhanced by international trade, fostering closer economic integration
• Access to resources and technology through international trade creates a more interconnected global economy

  True
• International trade stimulates economic growth and creates jobs.

  True
• The benefits of international trade foster closer economic ties between nations
• Specialization leads to increased productivity, while comparative advantage guides trade decisions.

  True
• Order the characteristics of domestic and international markets based on their scope:

  1️⃣ Domestic Market

  2️⃣ International Market
• International trade enhances economic integration worldwide.


  True
• Match the advantage of resource diversification with its example:

  Diversification of Resources ↔️ Japan imports iron ore from Brazil.

  Technological Advancements ↔️ The U.S. imports machinery from Germany.

  Economic Efficiency ↔️ Vietnam imports raw materials from China.
• Increased production through economies of scale reduces per-unit costs.


  True
• The main benefits of international trade include access to variety, specialization, economic growth, and improved living standards
• Match the benefit of international trade with its explanation:

  Access to Variety ↔️ Consumers can access a wider range of products and services

  Specialization ↔️ Countries focus on producing what they do best

  Economic Growth ↔️ Increased trade stimulates job creation

  Improved Living Standards ↔️ Lower prices and greater choice enhance living conditions
• Mexico has a comparative advantage in producing avocados because they can produce them at a lower opportunity cost
• Specialization and comparative advantage enhance the benefits of international trade

  True
• Match the characteristic with the type of market it describes:

  Market Size ↔️ Smaller in domestic markets, larger in international markets

  Consumer Choice ↔️ Limited in domestic markets, wide in international markets

  Competition ↔️ Lower in domestic markets, higher in international markets

  Price Levels ↔️ Higher in domestic markets, lower in international markets
• What does international trade allow countries to access in terms of resources and technology?

  Goods, services, and knowledge
• International trade refers to the exchange of goods and services between countries
• Match the benefit of international trade with its explanation:

  Access to Variety ↔️ Consumers can access a wider range of products and services.

  Specialization ↔️ Countries focus on producing what they do best.

  Economic Growth ↔️ Increased trade creates jobs and stimulates the economy.

  Improved Living Standards ↔️ Lower prices and greater choice enhance quality of life.
• Specialization and Comparative Advantage are key concepts in understanding international trade
• For consumer choice, international trade provides a broader range of products and services, leading to greater satisfaction
• International trade enhances access to resources and technology
• Economies of scale refer to cost advantages that businesses gain due to expanded production
• Order the benefits of international trade in promoting economic growth and competitiveness:

  1️⃣ Economies of Scale

  2️⃣ Specialization

  3️⃣ Technological Advancements

  4️⃣ Increased Competition