Term
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Definition
| when one nation can produce a product at lower cost relative to another nation |
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Definition
| where a country's cost of production, measured in opportunity cost terms, is lowerst. |
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Term
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Definition
| when countries import and export the same products at the same time. |
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Term
| splittling up the value chain |
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Definition
| when many of different stages of producing a good happen in different geographic locations |
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Term
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Definition
| policies that limit imports |
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Term
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Definition
| when government does not attempt to reduce or increase exports or imports |
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Term
| 2 most common protectionist policies |
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Definition
1)tariffs-taxes imposed on imports
2)import quotas-numerical limitation on quantity of products imported |
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Term
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Definition
| rules/regulations/inspections and paperwork that make it more costly/difficult to import products |
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Term
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Definition
| quotas affect is that of a tariff, except tht revenues-the "quota rents"- accure to the license-holder(the person or importer) granted the quota, not the domestic government that is able to set the tariff |
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Term
| argument against free trade |
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Definition
1)imports are killing the domestic industry; we need to save jobs.
2)Trade depresses wages-how can be possibly compete with country X where wages are a tiny fraction of American wages
3)trader partners, particularly in developing world, have abysmal labor standards
4)new industrieds need protection
5)other countries are"dumping"- selling internationally traded goods below their cost of production
6)trade is causing us to destroy the environment |
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