The costs of international trade
International trade creates winners, but it also creates losers. Workers lose jobs when cheaper imports replace domestic production, and countries can become dangerously dependent on foreign suppliers.
Real World
The UK steel industry collapsed in the 2010s partly due to cheap Chinese imports, with Tata Steel closing its Scunthorpe plant in 2016 and threatening 15,000 jobs — workers with specialist steel skills faced long-term structural unemployment.
Exam Focus
For 'assess' questions on trade costs, include structural unemployment and overdependence as separate analytical points, each with a supporting chain of reasoning.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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