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ECON340 Exam 2
International Economics
| Term | Definition |
|---|---|
| Comparative Adventage | each country should export some products, if the country has a relative cost advantage, & import other products, if the country has a relative disadvantage |
| Factor Endowments | Physical capital, skilled labor, unskilled labor |
| Scale economies | output quantity goes up by a larger proportion than does total cost, as output increases |
| Oligopoly | few large firms dominate the industry |
| Monopolistic Competition | a type of market structure in which a large number of firms compete vigorously with each other in producing & selling varieties of the basic product |
| Inter-industry trade | a country exports some products in trade for imports of other, different, products |
| Intra-industry trade | two-way trade in which a country both exports & imports the same or very similar producs |
| Tariff | a tax on importing a good or service into a country |
| Non Tariff Barrier (NTB) | any policy used by the government to reduce imports, other than a simple tariff on imports |
| Quota | a limit on the total quantity of imports of a product allowed into the country during a period of time |
| Import licensing | Requires importers to apply for & receive approval for intended imports |
| Voluntary Export Ristriction | A quota imposed by the exporting firm -exporting countries do this so the import country do not put a tariff on them |
| Government Powerment | -Non Tariff Barrier -can only by goods mad in your country |
| Technology & product standards | -Non Tariff Barrier -products must be safe, limit imports of goods because they have to be checked |
| Dying Industry argument | -an industry that is about to stop producing -they need assistance to help them -an argument is help the people in the dying industry get training and find new jobs |
| Non economic arguments against protetiion | 1.International Political Objective 2.Income Distribution 3.National Defense 4.Preserve National Culture |
| International Political Objective | -trade sanctions & embargoes to obtain political objectives -country is hurt by the sanctions it imposes |
| Income Distribution | -protection on the industry benefits unskilled workers -cheaper to directly help the worker through training |
| National Defense | what we must be able to produce our self in case we need them & can't get them from the world market |
| Preserve National Culture | To preserve the culture of a country |
| Trade Bloc | is a free trade within the world between countries |
| Free trade area | free trade among two countries |
| Common Union | countries have common external tariffs |
| Common factors | free movement of factors of production between countries |
| Economic Union | countries have harmonization of all economic policies -EX: close with countries in Euro zone and European Union -EX: US and the 50 states |
| Cartel | a group of producers of the same product that restrict output to drive up the price -ex: OPEC |
Created by:
NickUD
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