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9 Cards in this Set

  • Front
  • Back
agreement that was formed after WW2 to reduce the barriers, tariffs and subsidies on trade that is now replaced w/ the WTO
GATT
consumer surplus
the difference between the amount that a consumer actually pays for a good and the amount that they were willing to pay for it
four costs of transportation
1- tariff
2- transportation
3- transaction
4- time
weight-gaining industries
industries that manufacture products that gain weight as theyre produced
- ex: Coke syrup to Coke bottles
5 gains from trade
1- comparative advantage
2- comparative ability of factors of production
3- innovation and technology transfer
4- preferences for variety & economies of scale
5- differences in preferences & endowments
producer surplus
amount that producers benefit from selling a good at a market price that is more than theyd be willing to sell it for
3 degrees of economic integration
1- free trade area -> tariff barriers reduced among member countries
2- customs union -> same as above but tariffs placed on non-member countries
3- economic union -> free trade of people, goods, services and capital
weight-losing industries
companies that manufacture products that lose weight as theyre manufactured, production that takes place near the source of the raw materials
- ex: coal
footloose industries
industries that can be placed anywhere w/o having any effect on factors such as resources or transportation
- ex: diamonds, computer chips