Tulisan Softskill " International Trade "

Interstate commerce can take place because one or two countries can gain an advantage compared to when he or they do not trade. The advantage that is the basis of trade (gains from trade). According to the theory manifested in the form of widespread consumption opportunities or in economic theory called the attainment of satisfaction (utility) is greater. Or at least equal to the population in the country as compared to the existing level of satisfaction when there is no trade.

The trade between two countries can be explained by the differences in costs and prices of goods traded by the two countries. A simple example can be produced for example Indonesian clove cigarettes with lower cost and Japanese can make a radio at low cost. Then there will be a tendency for Indonesian clove cigarettes for export to Japan and vice versa Japan will export to Indonesia radio.

According to the classical theory of international trade, a comparison of the level of production efficiency can arise in absolute or comparative. The difference between the so-called absolute advantage (absolute advantage) and comparative advantage (comparative advantage). Adam Smith argued that a country will export goods that can be produced at a cost that is lower than if the absolute Other countries that produce goods. The country is said to have an absolute advantage in producing goods.

For example, in Indonesia it took 6 hours to produce 1 pack of cigarettes and 12 hours to produce 1 radio. Instead japan for example, takes 8 hours to produce 1 pack of cigarettes and 4 hours to make the radio. It can be said that Indonesia has the absolute advantage in the production of cigarettes and Japan has an absolute advantage in the manufacture of radio. Indonesia will specialize in the production and export of cigarettes and importing radios from Japan, with Japanese and vice versa.