4.1 - Patterns of Trade Flashcards
What are the main driving factors for trade?
Variety
Competition
Innovation
Growth + Development
Acquire new goods
Reduced international hostility
Which 3 factors are often used to explain patterns of trade?
Comparative Advantage
Economies of Scale
Product Differentiation
How does comparative advantage increase trade?
Nations have production advantages
Ability to become net exporter
How do EoS increase trade?
Specialisation reduces unit costs
Mass production benefits for manufacturers
How does product differentiation increase trade?
Stimulates wider variety of consumer demand
Demand is subjective
Give 3 advantages of specialisation
Lower average costs
Competitive markets
Variety of G + S
Outward PPF shift
Give 3 disadvantages of specialisation
Structural unemployment
Inflexibility
Overreliance
Rising transport costs - production overseas
What are the reasons for changing patterns of trade?
New industrial states + emerging economies
Deindustrialisation of developed states
Trade blocs
Communism collapse
How do new industrial states influence patterns of trade?
Globalisation + outsourcing
Share of manufacturing exports + global trade
How does deindustrialisation influence patterns of trade?
Less national output generated by manufacturing sectors
How do trade blocs influence patterns of trade?
Free trade within
Strict barriers to non-members
How did the collapse of communism influence patterns of trade?
Influx of trading states
Eastern bloc fucked off
