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Explain why countries engage in international trade

      

Explain why countries engage in international trade.

  

Answers


Simon
• Natural resources and geographical factors- different countries differs in natural resources and geographical distribution of various factors of production. A country will produce goods which it has production and natural advantage and then it will export them and import goods which has disadvantages.
• Occupational and population distribution- occupational and population distribution differs among countries. They determines which activities a country to encounter. For example a country whose citizens are farmers will major mostly in agriculture.
• Mode of transport – most industries are located near to the raw materials due to transportation costs. if the raw materials are far from the industries then it may be difficult to produce goods due to high transportation costs and if it will not produce it will have to import them hence bringing international trade
• Large scale production- if a country produces a good in large scale it will meet the demands of its market but it will need somewhere toy take the surplus so it will export it hence international trade.
• Different production costs- countries differ in production costs. A country will produce goods at which its production costs are low. If the production costs of a certain good are high then a country will have to import that good instead of producing it.
• Degree of sufficiency- many countries differs in the degree of sufficiency. A country which cannot produce a certain good will have to import the good from other countries.


skilled writter answered the question on March 29, 2018 at 17:21


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