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Economics Revision Guides
A-Level Revise Aid: This resource is designed to support your revision and may contain errors. If you find a discrepancy with your class teaching, your teacher is correct -- please let us know at alevelrevise@scott.scottrix.co.uk.

International Trade and Development

Year 1 / ASYear 2 / A-Level All Boards (AQA, Edexcel, OCR, WJEC, CCEA) AQA

A-Level Economics revision: International Trade and Development. Learning objectives, key points, worked examples and practice questions across AQA, Edexcel, OCR, WJEC and CCEA.

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📌 Key Points

Key Fact: Absolute: produce more with same resources; Comparative: lower opportunity cost -> specialise -> trade
Key Fact: Tariff: tax on imports -> domestic P↑, Qd↓, Qs↑, govt revenue, DWL; Quota: quantity limit; Subsidy: domestic producers
Key Fact: Floating: market; Fixed: central bank intervention; Managed: dirty float; PPP: identical goods same price in common currency
Key Fact: Globalisation: trade↑, capital flows↑, migration↑, tech diffusion; WTO: rules, disputes; Blocs: EU, USMCA, ASEAN
Key Fact: Development: import substitution (protect infant industries) vs export-led (E Asian tigers); Aid: tied/untied; Debt: HIPC initiative
Key Fact: HDI: life expectancy, education (mean/expected yrs), GNI pc; Gini: 0=perfect equality, 1=perfect inequality; Lorenz curve

🎯 Learning Objectives

  • Explain absolute and comparative advantage; gains from trade
  • Analyse protectionism: tariffs, quotas, subsidies, VERs; costs/benefits
  • Understand exchange rate systems: fixed, floating, managed; PPP theory
  • Analyse globalisation: drivers, benefits, costs; WTO, trade blocs
  • Evaluate development strategies: import substitution vs export-led, aid, FDI, debt
  • Use development indicators: HDI, MDGs/SDGs, inequality (Gini, Lorenz)

💡 Worked Example

Exam-Style Question

Question: Country A: 10 labour hours for 1 cloth or 5 wine. Country B: 6 cloth or 4 wine. Who has comparative advantage in what?

Model Answer:

A: OC 1 cloth = 2 wine (10/5), 1 wine = 0.5 cloth. B: OC 1 cloth = 0.67 wine (6/4), 1 wine = 1.5 cloth. B has CA in cloth (lower OC), A has CA in wine. A exports wine, B exports cloth. Both gain

❓ Practice Questions

Questions:

  • Calculate opportunity costs for CA
  • Draw tariff diagram showing DWL
  • Explain J-curve effect
  • Evaluate export-led vs import substitution
  • Interpret Lorenz curve and Gini

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📄 Past Papers & Exam Resources

🔗 Further Reading & Resources