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Chapter 20
International Trade
6
Economics
Undergraduate 1
04/27/2011

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Cards

Term
Comparative Advantage (614)
Definition
occurs when a person or country can produce a good or service at a lower opportunity cost than others
Term
Consumer Surplus (622)
Definition
the difference between the price a consumer is willing and able to pay for an additional unit of a good and the price the consumer actually pays; for the whole market, it is the sum of all the individual consumer surpluses-the area below the market demand curve and above the market price
Term
Producer Surplus (622)
Definition
the difference between what a producer is paid for a good and the cost of producing that unit of the good; for the market, it is the sum of all the individual sellers' producer surpluses - the area above the market supply curve and below the market price
Term
Tariff (625)
Definition
a tax on imports
Term
Import Quota
Definition
A legal limit on the imported quantity of a good that is produced abroad and can be sold in domestic markets
Term
Rent Seeking
Definition
Efforts by producers to gain profits from government protections such as tariffs and import quotas
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