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13 Cards in this Set
- Front
- Back
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Comparative Advantage
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The comparative advantage is the ability of an individual, firm, or country to produce a certain good at a lower opportunity cost than other competing producers.
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Specialization
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Specialization occurs when each firm produces only what it has a comparative advantage in and relies on trade for the other goods and services it needs.
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Absolute Advantage
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Absolute advantage is the ability of a firm to produce more of a certain good than other competing producers.
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Terms of Trade
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The terms of trade is the exchange rate of goods for goods.
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Export
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An export is any good that is produced domestically but sold abroad.
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Import
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An import is any good that is produced abroad but sold domestically.
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Net Importer
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A net importer means that imports are worth more than exports over a given time period.
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Net Exporter
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A net exporter means that exporters are worth more than imports over a given period of time.
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Free Trade
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Free trade is the ability to trade without hinderance or encouragement from the government.
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World Price
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A world price is the prevailing price of the good on the world market.
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Globalization
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Globalization is the shift towards more open, integrated economies that participate in foreign trade and investments.
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Protectionism
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Protectionism is the use of government regulations and barriers in order to control trade.
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Tariff
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A tariff is a tax levied on goods and services transported across political boundaries.
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