Question

transportation cost of trade affects​

Answer 1

Explanation:

Transport costs, much in the same way as tariffs, penalize goods produced in multiple stages across different countries, since producers need to pay for moving goods at each stage of the production process. A decline in transport costs will therefore be particularly beneficial for trade in vertically specialized goods.

Answer 2

ᴛʀᴀɴsᴘᴏʀᴛ ᴄᴏsᴛs, ᴍᴜᴄʜ ɪɴ ᴛʜᴇ sᴀᴍᴇ ᴡᴀʏ ᴀs ᴛᴀʀɪғғs, ᴘᴇɴᴀʟɪᴢᴇ ɢᴏᴏᴅs ᴘʀᴏᴅᴜᴄᴇᴅ ɪɴ ᴍᴜʟᴛɪᴘʟᴇ sᴛᴀɢᴇs ᴀᴄʀᴏss ᴅɪғғᴇʀᴇɴᴛ ᴄᴏᴜɴᴛʀɪᴇs, sɪɴᴄᴇ ᴘʀᴏᴅᴜᴄᴇʀs ɴᴇᴇᴅ ᴛᴏ ᴘᴀʏ ғᴏʀ ᴍᴏᴠɪɴɢ ɢᴏᴏᴅs ᴀᴛ ᴇᴀᴄʜ sᴛᴀɢᴇ ᴏғ ᴛʜᴇ ᴘʀᴏᴅᴜᴄᴛɪᴏɴ ᴘʀᴏᴄᴇss. ᴀ ᴅᴇᴄʟɪɴᴇ ɪɴ ᴛʀᴀɴsᴘᴏʀᴛ ᴄᴏsᴛs ᴡɪʟʟ ᴛʜᴇʀᴇғᴏʀᴇ ʙᴇ ᴘᴀʀᴛɪᴄᴜʟᴀʀʟʏ ʙᴇɴᴇғɪᴄɪᴀʟ ғᴏʀ ᴛʀᴀᴅᴇ ɪɴ ᴠᴇʀᴛɪᴄᴀʟʟʏ sᴘᴇᴄɪᴀʟɪᴢᴇᴅ ɢᴏᴏᴅs.

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