Term
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Definition
| the purchase, sale or exchange of goods and services across national borders |
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Term
| Theory of absolute advantage |
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Definition
| a national that produces more of a product with the same effort |
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Term
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Definition
| : countries export products requiring large amounts of their abondent production factors and import large amounts of their scares resources |
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Term
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Definition
| : this is the process that desribes the four periods of life of a product/service: investment and birth, growth, saturation, and finally the period of decline (is possible to go to another country to sell more; different places can be at different parts of the cycle) |
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Term
| What generates international trade? |
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Definition
| Differences in the endowments of the factors of production; Differences in the level of technology that determines that factors intensities used; Differences in the efficiencies with which technologies are utilized; Differences in foreign exchange rates; Trade theories do not account for taste differences, cultural and political variables, etc. |
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Term
| Poor country: wants bridge. Really expensive. Build. New gov’t kicks out. |
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Definition
| Borrow money from the country, Be secretive about how to maintain, control bridge, Buy all technological stuff from other countries. |
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Term
| Economies of scale/experience curve |
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Definition
| Price for unit drops over time (see slide for picture) |
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Term
| Factor proportions theory |
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Definition
| Countries produce and export goods that require resources (factors) in abundance and import goods that require resources in short supply |
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Term
| Two factor types of Factor Proportions theory |
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Definition
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Term
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Definition
Fundamentals:
· Gains from specialization and increasing economies of scale
· Companies first to market create barriers to entry
· Government may help by assisting home companies
First-mover advantages
· Economic and strategic advantage of being first to enter and industry
· May create a formidable barrier to market entry for potential rivals |
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