Study sets, textbooks, questions
Upgrade to remove ads
Chapter three: Comparative Advantage and Trade Gains
Terms in this set (28)
what are the four elements of successful economic development?
national strategic, economic structure, resource development, efficient use of resources
the term that refers to where products come from
system of nationalistic economies that dominated economic thought in the 1700s. favored exports because they earned gold for nations
gain of one nation is the loss of another
zero sum gain
what do trade barriers decrease?
specialization, technological progress, wealth creation
amount of output gained from a unit of input
units of outputs / hours worked
advantage held by a country that produces more of a certain good per hour worked than another
the value of the best forgone alternative to the activity actually chosen
-the benefits you could have received by taking an alternative action
held by a country that has the lower opportunity costs of producing a good than its trading partners do
-allows a country that lacks absolute advantage to sell its products abroad
refers to the fact that it is difficult to move up the value chain
-ex. china's reliance on cheap labor has powered the country to unprecedented heights but the manufacturing sector is being squeezed from one end by countries with even lower labor costs, while also struggling to move to higher grounds making more advanced products due to competition from developed nations such as Germany and the U.S.
middle income trap
the negative economic effect when a country has a single valuable resource
-labor concentrated in one sector alone, not diversified, risky, political, issues
what does the Korean economy demonstrate?
comparative advantage is not static
due to rapid increases in productivity, Korea was capable of exporting technologically sophisticated, state of the art products demonstrating the change in ___________ _________
what are the three factors needed to change the comparative advantage?
education, capital, infrastructure
term that refers to the altering of a country's comparative advantage
requires a demographic transition, country switches from a largely rural agrarian economy with high fertility + mortality to an urban industrial society characterized by low fertility and mortality
-per capita income grows, wealth creation grows
(number of people 0 to 14 + number of people 65+)/number of people 15 to 64
what is the dependency ratio used to measure?
pressure on the productive population
what does a higher dependency ratio indicate?
more financial stress on working people and possible political instability
the economic growth potential that can result from shifts in a population's age structure, mainly when the share of the working population is larger than the non-working-aged share of the population
WTO does not permit _____________
when does the comparative advantage not equal the competitive advantage?
when the markets fail to correct value the price of inputs and outputs (imbalances result from government policies such as subsidies or protections)
characteristics that permit a firm to compete effectively with other firms due to low costs, superior technology, aggressive marketing, international presence
-attributes and resources to perform at a higher level than others in the same industry or market
-maximizing scale economies
competitive advantage that resides inside the company
-competitive success depends on company choices
competitive advantage resides in the locations in which the company is based
-cluster participation is an important contributor to competitiveness
depends on the productivity with which a nation uses its human, capital, and natural resources
what are the four stages of the product cycle?
introduction, growth, maturity, decline
Sets found in the same folder
GPE Chapter 1: Introduction
Chapter Two: Economic Institutions
Chapter Four: Comparative Advantage & Endowments
Chapter 5: Beyond Comparative Advantage
Other sets by this creator
Psych of Personality 9-11
Psych of Personality 7&12
Psych of Personality Chapters 1-3
RCEP (Regional Comprehensive Economic Partner)
Other Quizlet sets
Act 1, Scene 1
3.18 K12 6th grade Unit Test: Human Kindness Part 1
Biomaterials Chapter 5 (Exam 2)
Acct Chapter 7