________ can buy less expensive raw materials and semi manufactured goods.
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Greater choice
________: consumers have access to domestic and international products.
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International trade
________: exchange of goods and services between countries.
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Absolute advantage
________: ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time.
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International trade
exchange of goods and services between countries
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Greater choice
consumers have access to domestic and international products
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Absolute advantage
ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time
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Comparative advantage
which goods should a country produce for export and which should it import
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**Comparative advantage**
which goods should a country produce for export and which should it import
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A**bsolute advantage**
ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time
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Economies of scale
Size of market increases
Demand increases
Production decreases
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12
Dumping
occurs when imports are sold at prices below their marginal costs
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specialisation
each worker, or each producer, is given a specialist role, they are likely to become efficient contributors to the overall process of production, and to the finished product
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Factors of Comparative advantage
A country has this in the production of a good if it can produce the good at a lower opportunity cost than another country.
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Factors of absolute advantage
A country has this in the production of a good if it can produce it using fewer resources than another country.
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**Limitations to production**
→ based on a number of assumptions
→ theories can limit the application of theory in real life
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Trade protectionism
policies aimed at restricting the flow of imports into a country and creating an artificial advantage to exporting firms
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Tariff
tax on imports aimed at increase the costs of production for foreign firms. These raise the domestic price and domestic production, so that less in imported and consumed
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Flashcard (48)