A small producer begins exporting and doubles output. Average cost falls, but exchange-rate changes make overseas revenue uncertain. What does this show?
International trade has only costs
Trade can create scale benefits while exposing firms to additional risk
Economies of scale prevent exchange-rate risk
Exporting guarantees higher profit
21 exam-style questions on OCR GCSE Economics 4.1 Importance of international trade, covering 4.1.1 Why countries import and export and 4.1.2 Free trade agreements. Each one has a worked solution and a mark scheme showing where the marks go.