International Trade via Supply and Demand

A set of flashcards covering key concepts related to international trade, supply and demand, and economic principles discussed in the lecture.

Absolute Advantage

The ability of a country to produce more of a good than another country.

Comparative Advantage

The ability of a country to produce a good at a lower opportunity cost than another country.

Exports

Goods produced domestically and sold abroad.

Imports

Goods produced abroad and sold domestically.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Consumer Surplus

The area below the demand curve and above the price, representing the benefit to consumers.

Producer Surplus

The area above the supply curve and below the price, representing the benefit to producers.

Tariff

A tax imposed on imports to raise the price of foreign goods and protect domestic industries.

Market Efficiency

The optimal allocation of resources where no one can be made better off without making someone else worse off.

Supply and Demand Model

A model representing the relationship between the quantity supplied and the quantity demanded at various prices.