chapter 11

the top 10 exporting countries account for --% of the total worlds exports

77

top 10 importing nations account for --% of imports

81

having the ability to produce more of a good than another producer

absolute advantage

subsidies

allow people to produce goods they dont have the comparative advantage so the government makes payments to them

america's top trading partners

canada and mexico

export nations

china U.S. germany japan netherlands france south korea italy belgium

being able to produce the good or service at a lower opportunity cost than another producer

comparative advantage

lowest cost producer/ most efficeint

comparative advantage

winners from trade

consumers of imports because they face lower prices and more of a variety of goods services and available firms and workers with comparative advantage, because they will have more exports markets for their goods and services society as a whole since trade allows consumption possibilities beyond the confines of the PPF

exporting goods and services generates an increase in demand and higher prices for supplies but at the same time causes a --- in quantity demanded and higher prices for domestic consumers

decrease

imports of goods and services generate an increase in supply and lower prices for consumers, but at the same time cause a --- in quantity supplied and decrease prices for domestic producers

decrease

increases in technology have -- the costs of transporting goods and services and have resulted in --- in international trade and gloablization

decreases increased

goods or services produced domestically or abroad

exports

losers from trade

firms and workers in import competing industries with out the comparative advantage, since they face inc competition and lower prices for the goods they sell consumers of exports since they may face higher prices for goods and services that are being exported

imports

goods or services produced abroad, but sold domestically

costs of protectionism

price gets higher deadweight loss created quantity supplied decreases

best way to be effiecient is to

produce one's own comparative advantage

out of the 3 tools of production, which do economists hate the most

quotas

tools of production

quotas tariffs subsidies

describes the price or rate of exchange of one good for another

terms of trade

in order for 2 countries to be better off, the ---- need to be between the 2 nations's opportunity costs of production

terms of trade

why is international trade controversial

the distribution of costs and benefits are unequal

the fact that the largest category of US goods exported is capital goods (machines, equipment, industrial, and aircraft engines) tells us that

the united states has the comparative advantage relative to many other countries in producing these goods

trading with neighboring countries has lower costs than

trading with farther countries

importing nations

us china germany japan france uk netherlands italy hong kong

trade surplus

when a country's level of exports exceeds its level of imports

trade defecit

when a country's level of imports exceeds its level of exports