produce, a country can produce more and offer that additional output for sale. If other countries specialize in

the area of their comparative advantage as well and trade, the highly productive country is able to benefit from

a lower opportunity cost of production in other countries.

19.3 Intra-industry Trade between Similar Economies

A large share of global trade happens between high-income economies that are quite similar in having well-

educated workers and advanced technology. These countries practice intra-industry trade, in which they

import and export the same products at the same time, like cars, machinery, and computers. In the case of

intra-industry trade between economies with similar income levels, the gains from trade come from

specialized learning in very particular tasks and from economies of scale. Splitting up the value chain means

that several stages of producing a good take place in different countries around the world.
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