INR 4011 (Cunha): Exam 1

economic protectionists

support protection and oppose fair trade

general protectionists

support protection and support fair trade

with

the H-O model is (with/without) factor mobility

factor type

the H-O model's trade preferences will reflect (factor type/industry of employment)

without

the R-V model is (with/without) factor mobility

industry of employment

the R-V model's trade preferences will reflect (factor type/industry of employment)

absolute advantage

the ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources

comparative advantage

the ability to produce a good at a lower opportunity cost than another producer

globalization

the process by which businesses or other organizations develop international influence or start operating on an international scale

human capital

the skills and knowledge gained by a worker through education and experience

firms and individuals

who trades, countries or firms and individuals?

Mayda and Roderik; Scheve and Slaughter

which author(s) support the factor model over the sector model?

women

(men/women) tend to be more anti trade

politicians, Americans

(politicians/Americans) are against trade while (politicians/Americans) are for it

positive

(positive/negative) correlation between level education and preference for free trade in advanced economies = evidence for factor model

capital-intensive goods

Capital-abundant countries will export _____; according to H-O model

fair trade

Fair prices are paid to producers in developing countries

less

Individuals in losing sectors, are (more/less) likely to be pro free trade

labor-intensive goods

Labor-abundant countries will export _____; according to H-O model

scarce

_____ factors will oppose trade; according to the factor model

abundant

_____ factors will support trade; according to the factor model

Heckscher-Ohlin model

a country that has an abundant supply of a factor of production will have a comparative advantage in goods whose production is intensive in that factor

Ricardo-Viner (specific-factors) model

a model of trade relations that emphasizes the sector in which factors of production are employed rather than the nature of the factor itself. This differentiates it from the Heckscher-Ohlin approach, for which the nature of the factor—labor, land, capital—is the principal consideration.

compatriotism

absolute gains from in-group

low land to labor ratio

abundance of labor and scarcity of land

high land to labor ratio

abundance of land and scarcity of labor

free trading (for)

abundant factors

zero-sum

an exchange in a purely conflictual relationship in which what is gained by one competitor is lost by the other

increases

at high income levels, consumption of services (health, education) (increases/declines) (and saving, too)

pro trade

comparative advantage sectors are...

protectionist

comparative disadvantage sectors are...

middle

consumption gains from trade should be highest for (lower/middle/upper) class

no

do voters vote based off of trade/tariffs?

ethnocentrism

evaluation of other cultures according to preconceptions originating in the standards and customs of one's own culture

industries

factors of production can move across _____ but not across countries; per the H-O model

land, labor, capital

factors of production; the sources of trade

wealthy

human capital will be pro-trade in (wealthy/poor) countries

immobile

in the R-V model, changes in trade fall mainly upon (mobile/immobile) factors

2 noneconomic factors individuals oppose trade

in-group favoritism, fairness concerns

3 economic factors individuals oppose trade

income effects, employment effects, consumption effects

cosmopolitan

looking at the interests of the entire world rather than a single nation

service (non-tradable) economies

modern economies are

services

non-tradable sector

free traders

oppose protection and oppose fair trade

fair traders

oppose protection and support fair trade

consumer

people who work in non-tradables can only experience trade as a...

4 ways Americans views are shaped on trade

perception of US economy's status, thoughts about the possible trading partner, attitudes towards people who are different compared to themselves, the political party in office

nationalism

pride in one's country

declines

proportion of income spent on food (increases/declines) as income rises

increases

proportion of income spent on tradable, durable goods (increases/declines) with income (up to a point)

intergroup competition

relative advantage of in-group (zero-sum)

protectionism (for)

scarce factors

Stopler-Samuelson Theorem

the theorem that protection benefits the scarce factor of production; trade reduces price of labor-intensive goods because imports from labor abundant countries are cheaper, while trade increases the price of capital-intensive goods because it is expensive in labor-abundant countries

manufacturing

tradable sector

Baumol's cost disease

tradable sectors begin growing with trade -> there is a rise in cost/wages in tradable sectors -> the non-tradable sectors need to keep up with the increase in cost/wages in the tradable sectors -> the cost/wages goes up also in non-tradable sectors

opportunity cost

whatever must be given up to obtain some item

nationalism and ethnocentrism

when it comes to determineing whether or not the American public supports trade, which is a better indicator: economic variable or nationalism and ethnocentrism

Ehrlich

which author(s) believes fair trade is sincere to some degree, meaning that people who support fair trade have non-economic sentiments behind their support?

Guisinger

which author(s) believes that knowing the public's preferences toward free trade or protection does not necessarily help us predict which trade policies will be enacted?

Baker

which author(s) believes that middle income Latin Americans benefit the most from trade; consumption of tradable, durable goods increases proportional to income but only to an extent? Ex: the poor do not have enough money to buy these goods while the rich would prefer to put their money towards things besides these goods.

Rogowski

which author(s) believes that owners of abundant factors will favor free trade and owners of scarce factors will oppose free trade?

Mutz and Kim

which author(s) explain views of free trade through the concept of "in-group" favoritism?

Mayda and Roderik

which author(s) looked at GDP per capita and education to interpret the effect of education on trade preferences?

Scheve and Slaughter

which author(s) looked at education and wage for trade preference?

Haiunmeller and Hiscox

which author(s) looked at the impact of education on trade attitudes by labor force statistics?