A UK bicycle firm imports cheaper gears, exports more finished bicycles and expands output. A rival that makes gears in the UK closes. Which assessment is best?
Trade must reduce UK output because an importing firm expanded
All UK producers benefit equally from cheaper imports
Trade benefits the bicycle firm and its customers, but the overall effect also depends on losses to the domestic gear producer and its workers
The closure proves that consumers face less choice
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.