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13 Cards in this Set
- Front
- Back
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free trade |
refers to a situation in which a government does not attempt to influence through quotas or duties what its citizens can buy from another country, or what they can produce and sell to another country |
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new trade theory |
stresses that in some cases countries specialize in the production and export of particular products not because o funderlying differences in factor endowments, but because in certain industries the world market can support only a limited number of firms |
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mercantilism |
it was a countrys best interest to maintain a trade surplus, to export more than it imported |
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zero sum game |
one in which a gain by one country results in a loss by another country |
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absolute advantage |
the production of a product when it is more efficient than any other country in producing it |
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constant returns to specialization |
the units of resources required to produce a good are assumed to remain constant no matter where one is on a countrys production possibility frontier |
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factor endowments |
they meant the extent to which a country is endowed with such resources as land, labor, and capital |
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economies of scale |
unit cost reductions associated with a large scale of output (spreading fixed costs to reduce costs) |
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first-mover advantages |
economic and strategic advantages that accrue to early entrants into an industry |
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factor endowments |
a nations position in factors of production, such as skilled labor or the infrastructure necessary to compete in a given industry |
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demand conditions |
the nature of home demand for the industry's product or service |
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related and supporting industries |
the presence or absence of supplier industries and related industries that are internationally competitive |
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firm strategy, structure, and rivalry |
the conditions governing how companies are created, organized, and managed and the nature of domestic rivalry |
