1. Autarky
    self-sefficency: a country that is nor participating in international trade
  2. Mercantilism
    political and ecomonic policy in the 17th and early 18th centuries ained at increasing a nation's wealth and power by encouraging the export of goos in return for gold
  3. Absolute advantage
    a country that is capable of producing a product with fewer labor hours.
  4. division of labor
    the practice of subdividing a production process into stages that can then be performed bt labor repeating the process, as on a production line.
  5. Comparative advantage
    the ability to produce a good or service more cheaply, relative to other goods and services, than is possible in other countries.
  6. Prodctions possiblility frontier
    a theoretical mehtod of representing te total productive capablilities of a nation used in the formulation if classical and modern trade theory.
  7. Opportunity cost
    the cost incurred by a form as the result of takinf one acion rather than another
  8. Factor intensities
    Factor proportions
    the proportion of capital input to labor input used in the production of a good.
  9. Factor Proportions Theory
    systematic explaination of the source of comparative advantage.
  10. input-output analysis
    the method for estimating market activities and potential that measures the factor inflows into a production and the resultant outflow of products
  11. Leontief Paradox
    Wassily Leontief's studies indicated that the united states was a labor abundant country, exporting labor intensive products. This was the paradoxbecause of the general belief that the united states was a capital abundant country that should be exporting capital abundant products.
  12. Market segment
    overlapping ranges of trade targets woth common ground and levels of sophistication
  13. product cycle theory
    • the thoery that veiws products as passing through four stages
    • 1.introduction
    • 2.growth
    • 3.maturity
    • 4.Decline
    • which the location of product move from industrialized to lower cost developing nations
  14. internal economies on scale
    when the cost perunit of the product of a single firm continues to fall as the firm's size continues to increase
  15. abandoned product ranges
    the outcome of a firm narrowing its range of products to obtain economies of scale, which provides opportunites for other firms to enter the market for the abandoned products
  16. intra-industry trade
    the similtaneous export and inport of the same good by a country. it is of intrest, due to the traditional theory that a country will either export of import a good, but not do both at the same time.
  17. Product differentiation
    the effort to build unique differences or improvments into products
  18. Foreign Direct investment
    the establidhment or expansion of operation of a firm in a foreign country. Like all investments it assumes a transfer of capital
  19. import substitution
    a policy for economics growth adpted by many developing countries that involves the systematic encouragement of domestic production of goods formerly imported
  20. internalization
    occurs when a firm establishes its own multinationaloperation, keeping information that is at the core of it competitiveness within the firm
Card Set
Inernational Business