Describe two benefits a country derives from specialization

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Case Study: International trade allows a country to focus on the goods/services that it produces best and trade for what it is unable to produce. This allows a country to specialize in certain goods, which leads to more efficient production. An example of this, is where Guyana may concentrate its resources at producing rice which it does best and Jamaica focuses on producing bananas which it able to use few resources to produce; at a lower opportunity cost.

Questions: Specialization improves trade volumes, as countries take advantages of their strengths and increase the economic well-being of citizens. World output is likely to increase also.

a. Based on the scenario above and the material covered in the course, outline three (3) benefits of international trade.

b. Describe two (2) benefits a country derives from specialization.

c. Outline three (3) arguments for andthree (3) arguments against free trade.

 

Reference no: EM133522481

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