International Trade and Economic Integration

These flashcards cover key terms and concepts related to international trade, economic integration, and political, economic, and legal systems as discussed in the lecture.

International Trade

The purchase and sale of goods and services by companies in different countries.

Gains from Trade

The economies gained from trading physical goods and services.

Free Trade

A situation where a government does not influence through quotas or tariffs what its citizens can buy or sell to other countries.

Comparative Advantage

The ability of an economy to produce a particular good or service at a lower opportunity cost than its trading partners.

Absolute Advantage

The ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs.

Mercantilism

An economic theory that emphasizes the importance of accumulating wealth through trade, where nations should export more than they import.

Heckscher-Ohlin Theory

A theory stating that the pattern of international trade is determined by differences in factor endowments; countries will export goods that use their abundant factors intensively.

New Trade Theory

A concept emphasizing economies of scale and variety of products in trade, stating that increased product variety reduces costs.

Porter's Diamond Model

A model that explains national competitive advantage based on firm strategy, demand conditions, related supporting industries, and factor conditions.

Regional Economic Integration

An agreement among nations to reduce or eliminate trade barriers and coordinate monetary and fiscal policies.

Political Union

A level of economic integration where countries coordinate their economic and political systems.

Common Market

A type of trade area where goods, labor, and capital can move freely among member countries.

Economic Union

An agreement where countries remove barriers to trade and coordinate their monetary and fiscal policies.

Common Law

A legal system based on tradition, precedent, and custom, with laws developed through court decisions.

Civil Law

A legal system based on a comprehensive set of written laws organized into codes.

Theocratic Law

A legal system based on religious teachings and beliefs.

Individualism

A political or social philosophy that emphasizes the moral worth of the individual over the collective.

Collectivism

A political or social ideology that emphasizes the need for collective or group management of resources and decision making.