Economics

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.