International Economics: Theory and Policy Chapter 9

These flashcards cover key vocabulary from Chapter 9 on trade policy in International Economics.

Tariff

A tax levied on imported goods.

Specific Tariff

A fixed charge for each unit of imported goods.

Ad Valorem Tariff

A tariff levied as a fraction of the value of imported goods.

Export Subsidy

A payment per unit exported, which raises the price in the exporting country.

Import Quota

A restriction on the quantity of a good that may be imported.

Voluntary Export Restraint (VER)

An agreement by an exporting country to limit the quantity of goods exported to another country.

Local Content Requirement

Regulation requiring a specified fraction of a final good to be produced domestically.

Consumer Surplus

The difference between what consumers are willing to pay versus what they actually pay.

Producer Surplus

The difference between the price received by producers versus the minimum price they would be willing to sell.

Terms of Trade

The rate at which one good is exchanged for another in international markets.