economics: section 7.5-7.6

absolute advantage

the ability of one individual to produce goods more effectively than his competitors / competitors

comparative advantage

the ability of a person to produce a good at an opportunity cost that is lower than another producer

geographic specialization

production of goods in which a country or region has absolute or comparative advantage

1. lower

2. regional absolute advantages 

3. trade relationships 

fill in the blank 

with geographic specialization, it…

1. Results in more goods at ____ prices across a nation 

2. _________ ________ ________ would be encouraged 

3. ______ _________ are being encouraged

protectionism

theory that domestic manufacturers need government protection against foreign competitors

protectionism

does not promote a healthy trade relationship among nations

david ricardo 

against protectionism; believes that protectionism does not promote a healthy trade relationship among nations

free trade

little to no restrictions on trade between nations or on goods produced in the nation

tariffs

taxes paid on imported goods before they can enter a nation

duty fees 

another word for tariffs

1. low

2. invested

fill in the blank

results of free international trade:

1. Prices will be ____ 

2. Savings will be ________ in other areas which will benefit the economy

1. not trustworthy

2. moral/social

3. dependence

fill in the blank

reasons to avoid international trade:

1. Some nations are ___ _________ 

2. Some nations have _____/______ problems 

3. __________ on other nation’s goods/economies may develop