Upgrade to remove ads
Only $35.99/year

Chapter 5 summary

Terms in this set (31)

imports
goods and services purchased from other countries.
exports
goods and services sold to other countries.
globalization
the phenomenon of growing economic linkages among countries.
Ricardian model of international trade
a model that analyzes international trade under the assumption that opportunity costs are constant.
autarky
a situation in which a country does not trade with other countries.
factor intensity
the difference in the ratio of factors used to produce a good in various industries. For example, oil refining is capital-intensive compared to clothing manufacture because oil refiners use a higher ratio of capital to labor than do clothing producers.
Heckscher-Ohlin model
a model of international trade in which a country has a comparative advantage in a good whose production is intensive in the factors that are abundantly available in that country.
domestic demand curve
a demand curve that shows how the quantity of a good demanded by domestic consumers depends on the price of that good.
domestic supply curve
a supply curve that shows how the quantity of a good supplied by domestic producers depends on the price of that good.
world price
the price at which a good can be bought or sold abroad.
exporting industries
industries that produce goods and services that are sold abroad.
import-competing industries
industries that produce goods and services that are also imported.
free trade
trade that is unregulated by government tariffs or other artificial barriers; the levels of exports and imports occur naturally, as a result of supply and demand.
trade protection
policies that limit imports.
protection
an alternative term for trade protection; policies that limit imports.
Recommended textbook explanations

Principles of Economics

8th EditionN. Gregory Mankiw
814 explanations

Krugman's Economics for AP*

2nd EditionDavid Anderson, Margaret Ray
1,042 explanations

Principles of Microeconomics

7th EditionN. Gregory Mankiw
508 explanations

Cambridge IGCSE Business Studies

4th EditionKaren Borrington, Peter Stimpson
467 explanations