Theory of trade

Adv

1.             scare resources distributed unevenly(Zimbabwe Cr)

2.             educated labour

3.             increases the variety of goods

4.             prices of factors of production tend to equalise

5.             more efficiency coz competition

6.             good cheaper wo protection

7.             ecofsca

disadv

1.             very powerful country forces bad exch. rates

2.             disecofsca

3.             transport costs

4.             monopolies abroad price discriminate(dumping)

5.             obstacles to trade (tariffs and quotas, political, currencies and language, some disguised barriers-safety, trade diversion).

6.             specialisation makes dependant

7.             factor immobility creates unemployment in SR

8.             infant and declining industries

9.             Cheap labour

10.           BoP

11.           Strategic reasons, preserve rural

12.           strengthen political links in EC

13.           reduce unemployment and depression

14.           Bargaining for better tariffs and more profits

15.           Revenue the government gets from duties.