Term
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Definition
| The advantage held by a country that produces more of a certain good per hour worked than another. (or say less labor hours per output). |
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Term
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Definition
units of output/ hours worked
the number of units of output that a worker can produce in one hour. |
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Term
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Definition
| of producing more of a product in a country is the amount of production of another product that is given up. |
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Term
| Opportunity Cost (Microeconomics) |
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Definition
| of a choice is the value of the best alternative forgone, in a situation in which a choice needs to be made between several mutually exclusive alternatives given limited resources. |
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Term
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Definition
| A country has a comparative advantage if the opportunity cost of producing that good in terms of other good is lower in that country than it is in other countries. |
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Term
| Production Possibilities Curve |
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Definition
| Shows all combinations of amounts of different products that an economy can produce with full employment of its resources and maximum feasible productivity of these resources. |
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Term
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Definition
| Shows the various combinations of consumption quantities that lead to the same level of well being or happiness. Indifference curves further from the origin correspond to preferred consumption bundles. (More is better. |
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Term
| Community Indifference Curve |
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Definition
| purport to show how the economic well-being of a whole group depends on the whole group's consumption of products. |
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Term
| Heckscher-Ohlin Trade Theory |
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Definition
| a country has comparative advantage in a good if the good uses its abundant factors intensively. So it should specialize in that product and trade it for other products that use it scarce factors intensively. |
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Term
| Stolper-Samuelson Theorem |
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Definition
| A corollary of the Heckscher-Ohlin Theory stating that changes in import or export prices lead to a change in the same direction of the income of factors used intensively in its productions. |
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Term
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Definition
| Exists if increasing expenditures on all inputs (with input prices constant) increases the output quantity by a large percentage. E.g. doubling all input amounts ( Labor, capital and so fourth) more than doubles output. |
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Term
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Definition
| A large number of firms compete vigorously with each other in producing and selling varieties of the basic product. |
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Term
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Definition
| A market with so few products that each firm can influence the market price. |
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Term
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Definition
| is the international trade of products made within the same industry. |
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Term
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Definition
| is the international trade of products in two different industries. |
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Term
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Definition
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Term
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Definition
The slope of the TT Line.
Let x=export
Let m=import
Px/Pm= terms of trade. |
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Term
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Definition
| A numerical limit on the volume of imports. Limitation on the quantity of imports, import licensing requirements (must obtain government licenses for imports), Voluntary Export Restraints (exporting country agrees to limit its exports for a period. |
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Term
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Definition
| a fixed percentage of the value of goods. |
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Term
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Definition
| is a fixed sum of money per physical unit of a commodity. |
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Term
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Definition
| is a combination of ad valorem and specific duties. |
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Term
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Definition
| is the difference between what a consumer is willing to pay for a good and what they actually pay. This is the area under demand curve, above price paid , up to quantity bought. |
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Term
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Definition
| is the difference between what the firm is willing to sell the good for and what it actually sells for. Is the area under price, above supply curve, up to quantity sold. |
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Term
| Consumption Effect of a Tariff |
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Definition
| When a tariff is imposed, the price of the imported product rises. People consume or buy fewer imports. The consumption of import substitutes increases. Price of import substitute goes up. |
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