IB Economics Trade

Why Trade Matters in IB Economics

Trade questions appear in every IB Economics exam, typically accounting for 15-20% of total marks. Understanding trade theory, policies, and their economic impacts is crucial for achieving top grades, particularly in Paper 1 essays and Paper 3 data response questions.

Core Trade Concepts - Essential Theory

Comparative Advantage and Specialisation

• Absolute vs Comparative Advantage Explained - david ricardo trade theory fundamentals

• Opportunity Cost in Trade Decisions - calculating opportunity cost international trade

• Production Possibility Curves for Trade - ppc trade specialization examples

• Gains from Trade Analysis - mutual benefits international trade theory

Trade Models and Frameworks

• Heckscher-Ohlin Trade Model - factor endowments international trade

• Stolper-Samuelson Theorem Applications - income distribution effects trade

• New Trade Theory Explained - economies of scale international trade

• Gravity Model of Trade - distance trade volume relationship

Trade Policy and Protection

Protectionist Measures

• Tariffs: Effects and Economic Analysis - tariff deadweight loss calculations

• Import Quotas vs Tariffs Comparison - quota effects domestic producers

• Non-Tariff Barriers Explained - standards regulations trade barriers

• Export Subsidies and Dumping - anti dumping measures wto rules

Arguments for and Against Protection

• Infant Industry Protection Analysis - developing countries trade protection

• Strategic Trade Policy Theory - government intervention trade advantages

• Environmental and Social Standards - sustainable trade policies

• National Security Trade Arguments - economic security trade restrictions

International Trade Organisations

World Trade Organisation (WTO)

• WTO Principles and Functions - most favoured nation treatment rules

• Dispute Resolution Mechanisms - wto panel rulings trade conflicts

• Doha Round Negotiations - multilateral trade liberalization

• Regional Trade Agreements vs WTO - preferential trade agreements impact

Regional Trading Blocs

• Customs Unions Analysis - european union trade creation diversion

• Free Trade Areas Explained - nafta usmca trade effects

• Common Markets Theory - factor mobility trade integration

• Economic Integration Levels - trade bloc progression stages

Trade and Development

Developing Countries and Trade

• Export-Led Growth Strategies - asian tigers trade development

• Primary Commodity Dependence - resource curse international trade

• Terms of Trade Analysis - prebisch singer hypothesis

• Trade Liberalisation Effects - structural adjustment programs trade

Trade and Inequality

• Income Distribution Effects - trade wages skilled unskilled workers

• Regional Inequality from Trade - trade impacts rural urban divide

• Gender Effects of Trade - women employment international trade

• Environmental Consequences - trade environmental degradation

Current Issues in International Trade

Trade Wars and Conflicts

• US China Trade War Analysis - tariff escalation economic impacts

• Brexit Trade Implications - uk eu trade relationship post brexit

• Trade and Technology Transfer - intellectual property trade disputes

• Supply Chain Disruptions - covid 19 global trade impacts

Digital Trade and Services

• E-commerce International Trade - digital goods trade regulation

• Services Trade Liberalisation - gats agreement trade services

• Data Flows and Trade - digital economy cross border data

• Cryptocurrency and Trade - blockchain technology international trade

Exam Preparation Strategies

Paper 1 Essay Techniques

• Trade Theory Essay Structure - comparative advantage essay planning

• Protection Policy Evaluation - tariff analysis essay format

• Trade Bloc Assessment - regional integration essay techniques

• Trade and Development Essays - ldcs trade policy evaluation

Paper 3 Data Response

• Trade Statistics Interpretation - balance of trade data analysis

• Exchange Rate Trade Links - currency trade competitiveness

• Trade Policy Impact Assessment - protection measures economic effects

• International Trade Calculations - trade balance current account

Case Studies for Deep Analysis

Historical Trade Examples

• Corn Laws Repeal Analysis - 19th century trade liberalisation

• Smoot Hawley Tariff Impact - great depression trade protection

• Post War Trade Liberalisation - gatt bretton woods trade system

• Asian Financial Crisis Trade - trade finance crisis contagion

Contemporary Trade Issues

• RCEP Agreement Analysis - regional comprehensive economic partnership

• African Continental Free Trade - afcfta trade integration africa

• Green Trade Policies - carbon border adjustments trade

• Trade and Climate Change - environmental goods trade liberalisation

Quick Reference Guides

Key Trade Formulas

• Terms of Trade = (Index of Export Prices / Index of Import Prices) × 100

• Trade Balance = Exports - Imports

• Effective Rate of Protection = (Tariff on Final Good - Weighted Average of Tariffs on Inputs) / Value Added

• Revealed Comparative Advantage = (Country's Exports of Good / Country's Total Exports) / (World Exports of Good / World Total Exports)

Essential Trade Diagrams

• Supply and demand with tariffs

• Production possibility curves with trade

• Customs union trade creation / diversion

• Terms of trade deterioration

Conclusion

Mastering international trade theory and policy is essential for IB Economics success. This comprehensive guide provides the framework for understanding both theoretical concepts and their real-world applications. Use these topic areas to build your knowledge systematically, focusing on the interconnections between trade policy, economic development, and global integration.

Remember to practice diagram drawing, numerical calculations, and essay writing techniques regularly. Trade questions often require sophisticated analysis combining multiple economic concepts, making thorough preparation crucial for achieving your target grade.

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For access to all key diagrams, model answers, and exam strategies,

Explore the Complete IB Economics Course

Are you having problems with your IB Economics IA?

Download the complete guide here (Free Download)