Economics

A surplus of supply

Underdeveloped countries don't have the productive capacities necessary to take advantage of increasing international trade.

When it gives up less than others to engage in a particular type of production

Specialized production

Flexible expenses vary over time.

To win political support

When they can produce it at a lower opportunity cost than other countries.

Some northern states made slavery against the law.

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.

Many developing countries do not benefit from free trade policies, because their industries are to weak to compete in the international market.

A restriction on when a union may call a strike

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