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Toni R named after Queen Mary.

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Mrs. Ramos
Individuals and countries should specialize in producing things in which they have a comparative advantage and then trade with other countries that specialize in something else. Simply put, countries should produce products for which they are better suited. For example, the U.S produces 40 percent of the world’s planes, so we have an absolute advantage. However, we produce less than 2 percent of the world’s shoes. It’s not that the U.S. can’t make shoes, we can. It just a lower opportunity cost (cheaper) to import shoes from Asian countries. This trade is mutually beneficial for both the U.S. and Asia.

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Mrs. Ramos

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Ms. Good

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Teacher's

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"Outline how specialization and international trade lead to increasing interdependence."

Due to specialization and international trade of goods and products, countries depend on each other for certain products (and trade) in order to complete production of their own countries product/products.  If shipments are delayed then that will hold up production in many other areas.  Interdependence, however, involves the loss of independence and has to rely on other countries in order to produce goods and services which means they give up some control over their own destiny.  Interdependence also makes consumers in one country dependent on the laws of another country due to product availability or changes in labor laws which could lead to shortages which in turn would raise prices. Due to a raise in prices, the demand would drop and businesses would either be forced to close or move to another country where labor was cheaper. So many factors involved with specialization and international trade - I think that one must weigh the opportunity costs before deciding what type of business to pursue - in any country.

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Mrs. Ramos