1.

When a country lacks the resources or capacity to meet its own needs and wants, it is necessary
for them to trade with other countries. Countries can produce an excess and exchange it for the
resources they require by developing and utilizing their limited domestic resources. Trade with
other nations is significant since it enables each nation to exchange goods, particularly when
there is a deficit in this area. Due to their physical location, all nations lack sufficient resources.
They trade goods to advance each nation's development.

2. The idea that a nation's wealth and power were best served by increasing exports and,
therefore, involved increasing trade, was known as mercantilism. It was the best trading system
that could be used during the sixteenth century. because the mercantilist movement was the
foundation of their prosperity. They were used as gold and silver in their trade currency to pay
for the goods they sent to other nations. Gold and silver served as the international trade
currency at that period. Silver and gold might be obtained by a nation from those nations.

3. If the United Kingdom can create better-quality textiles than France while France can produce
better-quality wine than the United Kingdom, absolute advantage advantages the economic
powers of 1776 like the United Kingdom of Britain and France. Because not everyone is able to
create it, there is an exchange of goods between the two nations to benefit them both.
Therefore, the core of Smith's thesis is that a nation should never make items at home that it
can purchase from other nations for less money. Smith argues that both nations gain from trade
by specializing in the manufacture of items in which they have a distinct competitive edge.

4. They have a comparative advantage since they can still manufacture the good even if there is no
trade with other nations. Even if this means purchasing items from other nations that it could
produce more efficiently itself, it makes sense for a country to specialize in the production of
those goods that it produces most efficiently and to purchase the goods that it produces less
efficiently from other countries. They lack the ability to obtain all the commodities they require
even though they are at absolute advantage. Smith argues that nations should focus on
producing the items for which they have a distinct advantage and then exchange these products
for those made in other nations. According to the Heckscher-Ohlin hypothesis, if they do not
exchange goods, they can nevertheless exchange labor and land for goods. According to the
Heckscher-Ohlin theory, nations will export commodities that heavily rely on locally abundant
resources while heavily importing items that heavily rely on locally scarce resources.

5. The Philippines is currently implementing a new trade theory. To produce tap water, Maynilad
Water Services Inc. had to invest heavily in a vast network of water pipes that stretched across
the entire nation. This investment has an extremely high fixed cost. However, the average cost is
reduced because they provide water to millions of homes. Several factors contribute to this,
such as the capacity to spread fixed costs over a large volume and the utilization by big-volume
 manufacturers of specialist personnel and machinery that is more productive than that of less
specialized personnel and machinery.

6. The competitiveness of a firm's plan for constructing worker-useable infrastructure and

fostering competition with other businesses in free-market trade in the Philippines. Porter's
model was created to help us comprehend the competitive edge the Philippines has that we can
employ to strengthen our economy. Additionally, we have the infrastructure, skilled manpower,
and ability to compete with other industries as production factors. It highlights the benefit of
production in helping us grow and innovate to meet our demands and gain a competitive edge.
The supplier of items that have been produced by Philippine companies must support their
customers due to the need for certain products in the country's markets. The corporations in
the Philippines are developing their strategies for how to enter the Philippine market system.