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AP Chapter 37 Vocab
N?A
22
Economics
12th Grade
05/06/2012

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Term
Labor-Intensive Goods
Definition

Goods whose design and production require much skilled labor.

Term
Trading Possibilities Line
Definition

A line that shows the different combinations of two products that an


economy is able to obtain when it specializes in the production of one


product and trades it to obtain the other product.

Term
Tariffs
Definition

A tax imposed by a nation on an imported good.

Term
Strategic Trade Policy
Definition

The use of trade barriers to reduce the risk inherent in product


development by domestic firms, particularly that involving advanced


technology.

Term
Land Intensive Goods
Definition

A product requiring a relatively large amount of land to be produced.

Term
Gains From Trade
Definition

The extra output that trading partners obtain through specialization of


production and exchange of goods and services.

Term
Revenue Tariff
Definition

A tariff designed to produce income for the federal government.

Term
Dumping
Definition

The sale of products below cost in a foreign country or below the prices


charged at home.

Term
Capital-Intensive Goods
Definition

A product that requires a large amount of human made resources in


order to produce.

Term
World Price
Definition

The international market price of a good or service, determined by world


demand and supply.

Term
Protective Tariff
Definition

A tariff designed to shield domestic producers of a good or service from


the competition of foreign producers.

Term

World Trade Organization

(WTO)

Definition

An organization of 145 nations that oversees the provisions of the


current world trade agreement, resolves trade disputes stemming from it, and holds forums for further rounds of trade negotiations.

Term
Cost Ratio
Definition

An equality showing the number of units of two products that can be


produced with the same resources; the cost ratio 1 corn= 3 olives


shows that the resources required to produce 3 units of olives must be


shifted to corn production to produce a unit of corn.

Term
Domestic Price
Definition

The price of a good or service within a country, determined by domestic


demand and supply.

Term
Import Quota
Definition

A limit imposed by a nation on the quantity of a good that may be


imported during some period of time.

Term
Principle of Comparitive Advantage
Definition

The total output will be greatest when each good is produced by the


nation that has the lowest domestic opportunity cost for that good.

Term
Export Supply Curve
Definition

An upward sloping curve that shows the amount of a product that


domestic firms will export at each world price that is above the domestic


price.

Term

Nontariff Barrier

(NTB)

Definition

All barriers other than protective tariffs that nations erect to impede


international trade, including import quotas, licensing requirements,


unreasonable product quality standards, unnecessary bureaucratic detail


in customs procedures and so on.

Term
Import Demand Curve
Definition

A down sloping curve showing the amount of a product than an


economy will import at each world price below the domestic price.

Term

Voluntary Export Restriction

(VER)

Definition

Voluntary limitations by countries or firms of their exports to a particular


foreign nation to avoid enactment of formal trade barriers by that


nation.

Term
Terms of Trade
Definition

The rate at which units of one product can be exchanged for units of


another prodcut; the price of a good or service; the amount of one good


or service that must be given up to obtain 1 unit of another good or


service.

Term
Equilibrium World Price
Definition

The price in a competitive market at which the quantity demanded and


the quantity supplied are equal. No shortage nor surplus.

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