chapter  12
14 Pages

Agriculture and the global economy

This chapter explains why international trade and globalization occur. It also tells why most economists are enthusiastic supporters of free international trade. In simple terms, free trade carries many of the same implications as perfect competition: it is a hard-to-reach objective that can make many individuals better off. The chapter uses examples from food and agriculture to explain the motivations behind international trade. The chapter also explains the principle of comparative advantage as it applies to the globalization of trade in food and agriculture. The chapter ends with an explanation of the importance of diversity in national resources.