Microeconomics Ch. 8

  1. Comparative Advantage
    can produce a good with a lower opportunity costs – basis of al trade. (can’t have in both products)
  2. Absolute Advantage
    can produce more with the same amount of resources. (can have in both products)
  3. External Economies
    reductions in a firm’s costs that result from an expansion in the size of an industry.
  4. Quantity Imported
  5. Protectionism
    the use of trade barriers to shield domestic companies from foreign competition. (saving jobs, protecting high wages, national security)
  6. Quota
    limit imposed by gov’t on the quantity of a good that can be imported into a country.
  7. Globalization
    when countries become more open to foreign trade and investment.
  8. Terms of Trade
    the ratio at which a country can trade its exports for imports from other countries.
Card Set
Microeconomics Ch. 8
Equations and Definitions