The ability to produce more of a good or service than competitors when using the same amount of resources.
What is absolute advantage?
100
Trade between countries that is without government restrictions.
What is free trade?
100
An international organization that oversees international trade agreements.
What is world trade organization (WTO)?
100
The US economy would gain from the elimination of tariffs and quotas, but only if other countries reduce their tariffs and quotas.
What is FALSE
200
Goods and services bought domestically but produced in other countries
What is imports?
200
A situation in which a country does not trade with other countries.
What is autarky?
200
The highest valued alternative that must be given up to engage in an activity.
What is opportunity cost?
200
The process of countries becoming more open to foreign trade and investment.
What is globalization?
200
Comparative advantage may change as time passes and circumstances change.
What is TRUE.
300
Goods and services producers domestically but sold in other countries.
What is exports?
300
The ratio at which a country can trade its exports for imports from other countries
What is terms of trade?
300
A numerical limit a government imposes on the quantity of a good that can be imported into the country.
What is a quota?
300
The use of trade barriers to shield domestic firms from foreign competition?
What is protectionism?
300
The domestic customers of the firms that went out of business are the only ones harmed when individual nations move from autarky to free trade.
What is FALSE?
400
The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.
What is comparative advantage?
400
Reductions in a firm's costs that result from an increase in the size of an industry.
What is external economies?
400
An agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country.
What is voluntary export restraint (VER)?
400
Selling a product for a price below its cost of production.
What is dumping?
400
The primary difference between a quota and a voluntary export restraint is that the quota is unilaterally imposed by one nation while the VER is the result of negotiations between nations.
What is TRUE?
500
The 2 forms of government policies that restrict trade.
What is tariffs (or quotas) and voluntary export restraints?
500
What are the main sources of comparative advantage?
What is climate and natural resources, relative abundance or labor and capital, technology, and external economies?
500
When world price is less than a country's market price, the country will do this.
What is import?
500
When the world price is greater than a country's market price, the country will do this.
What is export?
500
Protectionism is usually justified on the basis of several arguments which include saving jobs, protecting infant industries, and protecting national security.