One country produces solar panels at a lower cost than its trading partner, while the trading partner produces wheat at a lower cost. The two countries remove barriers to trade with each other.
Which outcome provides an argument in favour of removing the trade barriers?
Each country can specialise in its lower-cost product and trade, increasing total output
Home producers can be sheltered from competition from imported products
Imports can become more expensive because tariffs are charged at the border
Both countries can shift resources towards the product they produce at higher cost
118 exam-style questions on AQA GCSE Economics 2.4 International trade and the global economy, covering 2.4.1a The importance of trade, 2.4.1b Advantages of trade and interdependence, 2.4.1c UK exports and imports, 2.4.2a How exchange rates are determined, 2.4.2b Effects of exchange rate changes, 2.4.3a Free-trade and its arguments, 2.4.3b Free-trade agreements such as the EU, 2.4.4a Features and growth of globalisation, 2.4.4b Benefits and drawbacks of globalisation, and 2.4.4c Moral, ethical and sustainability considerations. Each one has a worked solution and a mark scheme showing where the marks go.