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Eckman's horrible study guide
study guide
70
Economics
Undergraduate 4
10/06/2011

Additional Economics Flashcards

 


 

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Term
What are barriers to trade?
Definition
tariffs, quotas, limits on investment
Term
why do countries trade
Definition
countires do not want to be self suffiecient, for efficiency and for specialization
Term
5 economic concepts that underlie trade
Definition
scarcity and choice
opportunity cost
rationing and incentives
supply and demand
gain from voluntary trade
Term
Mercantilism
Definition
countires wealth is determined by how much gold/treasures it holds
Term
Absolute advantage
Definition
if all nations can produce at lowest caot and most efficiently than all nations will have a greater quantity of goods at more efficient costs
Term
comparative advantage theory
Definition
a country should produce more of an item when it opportunity cost is lower than another countires
Term
Factor production theory
Definition
countries that have large supply of labor should produce labor intensive goods
Term
factor production (capital)
Definition
countries that have large supply of capital should produce hugh tech often being a country with higheducated and skilled labor force
Term
Developmental theories of trade
Definition
emphasis on structural conditions,
based upon level of development:
ZONES: first world core, second wold semi-periphery and third world periphery
Term
Ways of Measuring levels of development
Definition
-level of well being
-terms( GNP/GDP/PPP)
-relationship between levels of development and textile apparel industry
Term
Levels of well being
Definition
newly developing
developing
developed countires
Term
Newly developing
Definition
india, china, jordan, indonesia, honduras. issue government has chosen apparel production as primary market.
Term
Developing countries
Definition
mexico, costa rica, turkey, romania, all used apparel production to grow national economy and focused primarily on production for export and increasingly production for domestic market
Term
Developed countries
Definition
US japan australia western europe, no longer major producers rather major consumers. most competitive in production of textiles and least competitive in the production of apparel
Term
why is the apparel industry so attractive to developing countries?
Definition
this industry employs many people
requires low skills
low start up costs and low capital investment
earns valuable foreign exchange
Term
GNP
Definition
output per citizen of that country
Term
GDP
Definition
value of goods and services produced by all worker even in other countires
Term
PPP
Definition
purchasing power parity looks at adjusted prices over different currencies us $ is standard measure
Term
Textile complex
Definition
Fiber Industry
Textile Mills products
end market manufacturer
retailers
consumers
Term
Level 1 2 &3
Definition
1) agricultural production and textile manufacturers
2) textiles textile product findings and trim manufacturers
3) apparel manufacturer apparel contractors and sourcing companies and retail product developers
Term
out sourcing
Definition
shifting processes to another country
Term
outward processing
Definition
refers to outsourcing
Term
sourcing
Definition
finding the most efficient vendor of materials , production, and finished goods.
Term
3 criteria sourcers considerations
Definition
time line or location
cost
services
Term
basic goods
Definition
staple t shirt and jeans, do not change very often these goods are most appropriate for "quick retail"
mass production /economies of scale larger your output less it costs
Term
fashion impact on: the firm consumer and society
Definition
the firm: entry is facilitated, small scale production, profits
consumer: production costs higher, eventual product obsolescence, product performance is neglected
Impact on society unnecessary obsolescence and disposal of discarded products
Term
fad vs classics
Definition
fads have shorter product life cycle where as classics have longer than fashion product life cycles
Term
minimum wage
Definition
lowest wage determined by law or contract that an employer can pay an employee
Term
living wage
Definition
a wage sufficiently high enough to provide a a minimally satisfied living conditions
Term
income elasticity of demand
Definition
% change in clothing expense / % change in income
Term
price elasticity of demand
Definition
%change in clothing expense/ %change in price
n is more than 1 = big response
n is equal to 1 = proportional response
n is less than 1= little response
Term
CPI
Definition
cost of market goods current/ cost of market goods in base year
Term
standard of living
Definition
level of consumption urgently desired or strived for
Term
income
Definition
the consumption and savings opportunity gained by an entity within a specific time frame
Term
measure of wel being or consumption
Definition
standard of living/ working conditions/ safety and security/ political atmosphere
Term
clothing expenditures have gone down over time due to:
Definition
lower inflation for apparel increases in income more consumption options such as recreation or traveling, decrease in clothing as status symbol such as "knockoffs"
Term
Manufactured fibers history
Definition
man made, cellulose 1889, rayon 1924 (replaced cotton), viscose acetate in 1951, (big 3 nylon, acrylic, and polyester)
Term
rayon issues:
Definition
expensive to produce, damaged the environment, less strength when wet rayon is now produced in asia due to laws
Term
industrial revolution
Definition
development of technology to replace labor and moving production form home to factory
Term
technology development timeline
Definition
1733 floor looms> Kays flying shuttle
1793 whitney's cotton gin
1795 Cartwright power loom
1895 battery loom
Term
Economical development
Definition
before 1776 (US still ran by england) us was not allowed to have textile mills
1793 first textile mill in rhode island
1812 war with great britain (embargo, tariff, import substitution)
Term
Demand changes
Definition
apparel started in 1820s (garments and accessories) sailors minors and plantation workers all demanded RTW clothing no standard sizing was in place at this time
MYANMAR sizing for men
after civil war came economic expansion and more demand for RTW
Term
Production changes
Definition
1846 lock stitch machine by howe
1870 cutting machines
1880-1910 jewish immigrants
Term
Jobber contractor systems
Definition
a business organization with the jobber taking on the risk (marketing and management) and the contractor offers efficiency in consistent garments
this brings expansion and flexibility
Term
Unions
Definition
created to promote friendly relations with management and workers
Term
economic development in 20th century
Definition
-rise of international economic interdependence
-us as world leader pre ww2 isolationist 1945-60 was major growth
-volatility of world trade GATT turn WTO
-rise of imports (big 3 south korea hong kong and taiwan)
Term
Global perspective
Definition
-economic growth forced to globalize
-production: constant demand for clothes employs many people requires low skills and low investment
-communication
-transportation systems institutional arrangements
(MFA GATT WTO IMF)
Term
NAICS north american industry classification system
Definition
began as a result of nafta used to communicate across countries, identifies sector, subsector group, industry nation. this facilitates record keeping and reporting
Term
Technology developments
Definition
industry wide technology: transportation and logistics, communicating, tracking deliveries, quick response partnerships, radio frequency identification
Term
3 revolutions
Definition
-industrial revolution 1700s
-innovation of fibers 1800s
-innovation of manufacturing
all have allowed for capital intensive in the us and to become competitive
Term
Apparel production
Definition
mass communication
floor ready merchandise
CAD computer aided design
difficulties in substituting capital for labor
Term
Labor issues
Definition
female workers: vulnerable to lose jobs due to shifting production women dont complain as much
Child labor: laws and violations under 15 yrs it is illegal to work, offer cheap labor and special techniques
sweatshop: below minimum wage labor, unregulated mandatory homework, no benefits
Term
import penetration
Definition
consumption increases but paying less and is increasing for apparel higher than for textiles
Term
Developing vs undeveloped
Definition
undeveloped =cheap labor, illiteracy education, and infrastructure (such as roads, phones etc.)
Term
total consumption =
Definition
production +imports -exports
Term
impact penetration value of imports/ total consumption
Definition
Term
new world order
Definition
decrease in production in developed countries, increase in number of countries producing and trading, increased consumption of imports in developed countries "the world is flat" by thomas freedman
Term
trade barriers and regulation 3 areas of globalization:
Definition
1400 -1914 globalization of countries post civil war was major time to produce goods
1915 - 2000 globalization of companies (IMF GATT MFA world bank)
2001 to present globalization of individuals
Term
2 philosophies of protected trade
Definition
trade protectionists= democrats
free traders= republican
Term
Trade protection
Definition
reduces competition
makes competition more fair
Term
impact of protection on firms
Definition
higher price, growth and additional jobs
Term
impact of protection on consumers
Definition
higher prices less selection in market place
Term
tariffs and duties
Definition
specific: standard fixed amount per unit revenue goes to government and offers little protection for trading up
ad valorem: fixed percent /value or product which does add protection for trading up
Term
non tariff barriers
Definition
quota
exchange rates
import licensing
labeling domestic law content
price support programs
safety and health standards
subsidies for domestic firms
Term
Unilateral agreement
Definition
one country regulates imports and other country does not consent
Term
Multilateral restraint
Definition
2 or more countries giving consent
Term
bilateral restraint
Definition
consent from both countries
Term
General agreement on tariffs and trade
Definition
was established to liberalize trade and to promote trade with out discrimination
Term
Multifiber arrangement has caused imports to increase due to:
Definition
bilateral agreements not being comprehensive in covering all products, and base level of imports was increased and the MFA was not well managed
Term
ATC agreement on textiles and clothing
Definition
purpose is to phase out MFA, not renewable, phase put quotas and reduce tariffs
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