International Economics - Chapter 1

Trade connects people and societies, promoting prosperity and peace.

The trading of goods and services between countries. It is essential for supporting economic growth and providing consumers with a wider variety of products.

Exports and imports contribute significantly to a country's overall economic performance, often exceeding their national income.

The total value of goods and services traded between countries, measured in billions of dollars.

The largest trading bloc in the world, accounting for about 21% of global trade.

Both parties in a trade transaction benefit by receiving something desirable, leading to mutual improvement.

Each country specializes in producing what it does best, utilizing its resources efficiently.

The trade between the European Union and the United States, representing 26% of world trade.

The trade between countries in North, Central, and South America, totaling 8% of world trade.

Countries utilize their abundant resources for exports while importing goods that require scarce resources.

Trade originating from countries in Asia, accounting for 29% of world trade. China is now the world's largest exporter.

International competition can benefit consumers by offering lower prices and a wider choice.

While trade benefits a nation as a whole, its impact on income distribution within the country can be uneven.

The trade between countries in the Middle East, Russia, and neighboring regions, representing about 9% of world trade. Oil and natural gas are key exports.

Trade from African countries, accounting for only 2% of world trade, despite its large landmass and population.

Trade patterns are evolving due to globalization, leading to increased interconnectedness and global trade flows.

A market structure where individual buyers and sellers have no influence on prices, and many firms compete with identical products.

A market structure where a few large firms dominate the market, each with some control over prices.

A market where a single firm controls the entire market, setting prices and having significant control over supply.

The relationship between the price of a good or service and the quantity that consumers are willing and able to buy. It slopes downwards, indicating that as prices fall, demand increases.

The relationship between the price of a good or service and the quantity that producers are willing and able to supply. It slopes upwards, indicating that as prices rise, supply increases.

The point where the supply and demand curves intersect. It represents the price and quantity where the market reaches a balance.

The study of how nations interact with each other through trade, money flows, and investments.

The exchange of goods and services between countries, often influenced by factors like comparative advantage and trade agreements.

The additional cost incurred by producing one more unit of a good. Calculated by the difference in total cost between two levels of production.

The total cost divided by the number of units produced. It's a measure of the average cost per unit.

The additional benefit gained from consuming one more unit of a good or service, which is assumed to be constant in this example.

The point where the marginal cost of producing one more unit is equal to the marginal benefit of consuming one more unit. In this scenario, it is the optimal number of space shuttle launches for NASA.

The ability of a market to adjust to changes in supply or demand, often due to the free entry and exit of firms. This helps to ensure that resources are allocated efficiently and that prices reflect the true cost of production.

The point at which the total benefit of producing or consuming an additional unit of a good is equal to the total cost. In this example, it's the point where the benefit of launching another space shuttle is no longer worth the cost.

A market situation where a good is standardized, meaning that buyers are indifferent to which seller they purchase from. This is often approximated in real-world markets.

The total value of goods and services produced in a country during a specific period, typically a year.

A model in international trade that suggests that larger economies tend to trade more with each other.

The value of goods and services a country exports and imports.

The five countries with the highest volume of trade with the United States in 2015.

The top twenty countries with the highest volume of trade with the United States in 2021.

The top three largest European economies in 2021.

The U.S. trade with its top trading partners in 2022, measured in billions of dollars.

The relationship between the size of European economies and their trade volume with the United States.

A model that estimates trade flows between countries based on attributes like their economic size and distance.

A type of trade agreement where member countries remove trade barriers among themselves, but maintain them with non-member nations.

A trade agreement that eliminates tariffs and other trade barriers between member countries, aims to harmonize trade policies, and promotes cooperation in other areas.

The changing mix of goods and services traded between countries over time.

The process of a company moving its service operations to a foreign country.

Jobs that can be performed remotely and thus can be potentially outsourced to other countries.

Jobs that require a physical presence in a specific location, making them difficult to outsource.

The percentage of jobs in an economy that have the potential to be outsourced, highlighting the potential for service trade.