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☆☆☆☆☆To help countries achieve sustainable development
Increased mobility allows producers to move jobs to lower-cost labor markets.
Countries with well-established infrastructure and productive capacities have more competitive industries.
There must be an international division of labor for a country to specialize its production.
Its main purpose is to promote development, not make profits.
When they can produce it at a lower opportunity cost than other countries.
Free-trade policies
Think that you're country A, wanting to buy pen and paper.
Country B produces 1 million pen and 1 BILLION paper
Country C produces 1 BILLION pen and 1 million paper
Or, country B has the absolute advantage over production of paper while
country C has the absolute advantage over production of pen.
Coming back our theory of economy of scale, we know that to a certain point, increased production would lead to lower average cost and thus, lower price.
This would mean that paper from country B is cheaper than country C whereas pen from country C is cheaper than country B.
Therefore, you would choose to trade paper with country B while trading pen with country C.
And this is why it is important to making economic choices.
