The Simple Trade Model Demonstrates That Countries Can Expand Consumption

question 15

Essay

The simple trade model demonstrates that countries can expand consumption by specialising in the production of goods and services in which they have a comparative advantage.In reality we do not see complete specialisation in production.State three reasons why this is case.

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Definitions:

Distributor

An intermediary entity that buys products from manufacturers and sells them to retailers or directly to consumers.

Horizontal Price Fixing

An illegal agreement between competitors to fix, control, or maintain prices at a certain level, often leading to reduced competition.

Airline Companies

Businesses that provide air transport services for traveling passengers and freight.

Tickets

Documents or electronic codes that grant the holder a right to enter a venue, travel on a vehicle, or participate in an event.