1. Benefits and Issues of International Trade
Unit 17.1

2. Resource Distribution and Specialization
No one country has all it needs
Natural Resources
Human Capital
Physical Capital
Entrepreneurship
Specialization
Interdependence

3. Absolute and Comparative Advantage
Absolute Advantage
Whoever has the greatest production in that specific area
Comparative Advantage
Whoever has the lower opportunity cost of making the item
Law of Comparative Advantage
Countries gain when they produce items that have the lowest opportunity cost

4. International Trade Affects the National Economy
Exports
International demand shifts the demand curve to the right, raising prices and increasing quantity. While this makes the item more expensive in the home country, it creates jobs and bring in capital.
Imports
International supply of goods shifts the supply curve to the right, lowering prices and creating competition to produce better locally (though this often leads to job losses)