International Trade Policy Flashcards

Flashcards for International Trade Policy lecture.

Production Possibilities Frontier (PPF)

The boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology.

Absolute advantage

When one person (or nation) is more productive than another. Need fewer inputs or less time to produce a good or perform a production task.

Comparative advantage

The ability of a person (or nation) to perform an activity or produce a good or service at a lower opportunity cost than someone else (or another nation).

Sustainable development

Economic development that is conducted without depletion of natural resources.

Tariff

A tax on a good that is imposed by the importing country when an imported good crosses its international boundary.