ECON111 Final CH 19
quota
a limit on the quantity of a good that may be imported in a given time period
closed economy
a nation that doesn't engage in international trade
open economy
a nation that engages in international trade
embargo
a prohibition on exports or imports
tariff
a tax (duty) imposed on imported goods
over a given time period, if imports are greater than exports, the result is ___
a trade deficit
voluntary restrain agreement (VRA)
an agreement to reduce the volume of trade in a specific good; a voluntary quota
specialization in production and then trading with other countries does what to the output?
changes the mix of output for each country and increases total world output
when tariffs are imposed, the losers include ____
domestic consumers and foreign producers
what should happen to the equilibrium price and quantity in a market as a result of a tariff on imports?
equilibrium price should go up, and equilibrium quantity should go down
in terms of the world as a whole, why must imports must equal exports?
every good exports by one country becomes an import for another country
imports
goods and services purchased from international sources
exports
goods and services sold to foreign buyers
when a country imposes tariffs, it is likely to cause what?
higher prices for the import-competing goods
when a country has a lower opp cost in producing a good then another country, its consumption possibilities will do what?
increase with specialization and trade
when a country has a lower opportunity cost in producing a good than any other country, consumption possibilities will ____
increase with specialization in trade
if a country is completely self-reliant in producing goods for its own consumption needs, what will happen to its PP?
its consumption possibilities equal its production possibilities
the US exports mare than it imports in ___
only services
a principle objective of the World Trade Organization is to
reduce barriers to trade
increased trade restrictions ____
reduce total consumption possibilities
if exports are being excluded unfair from a market, the WTO may authorize what?
retaliatory tariffs
as trade restrictions are eliminated, increased imports ____
shift the allocation of resources away from import-competing industries
comparative advantage
the ability of a country to produce a specific good at a lower opportunity cost than its trading partners
absolute advantage
the ability of a country to produce a specific good with fewer resources (per unit out output) than other countries
consumption possibilites
the alternative combinations of goods and services that a country could consume in a given time
trade surplus
the amount by which the value of exports exceeds the value of imports in a given time period
trade deficit
the amount by which the value of imports excess the value of exports in a given time period
opportunity cost
the most desired goods or services that are forgone in order to obtain something else
equilibrium price
the prie at which the quantity of a good demanded in a given time period equals the quantity supplied
terms of trade
the rate at which goods are exchanged; the amount of good A given up for good B in trade
dumping
the sale of goods in export markets at prices below domestic prices
