International Trade Concepts
14 Questions
100 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is absolute advantage?

  • The ability to produce a good or service at a lower opportunity cost than another country
  • Requiring or relying on something
  • The ability to produce a good or service more efficiently than another country can produce the same good or service (correct)
  • The act of limiting the kinds of goods and services produced

    • What is comparative advantage?

  • The ability to produce a good or service at a lower opportunity cost than another country (correct)
  • Requiring or relying on something
  • The ability to produce a good or service more efficiently than another country
  • The act of limiting the kinds of goods and services produced

    • What does it mean to be dependent?

    Requiring or relying on something

    What is specialization?

    <p>The act of limiting the kinds of goods and services produced</p> Signup and view all the answers

    A country with an absolute advantage can produce a good or service more efficiently than another country.

    <p>True</p> Signup and view all the answers

    Which internationally traded product is the Middle East best associated with?

    <p>Oil</p> Signup and view all the answers

    Which region specializes in diamonds?

    <p>Sub-Saharan Africa</p> Signup and view all the answers

    Provide an example of a country that is dependent on other countries.

    <p>A country that has little fertile soil</p> Signup and view all the answers

    What is it called when a company in Maine sends lobsters to France?

    <p>Exporting</p> Signup and view all the answers

    What does it mean when the United States is said to have an absolute advantage in producing food compared with Japan?

    <p>It produces food more efficiently than Japan</p> Signup and view all the answers

    Why would a country want to establish absolute advantage?

    <p>To produce goods more efficiently than other countries</p> Signup and view all the answers

    What is the best example of opportunity cost?

    <p>A country that chooses to export bananas but not wheat</p> Signup and view all the answers

    Why does the US import oil?

    <p>Because it does not produce enough oil</p> Signup and view all the answers

    Give an example of a country that is overly dependent on another country for critical goods and services.

    <p>A country that imports all its oil</p> Signup and view all the answers

    Study Notes

    International Trade Concepts

    • Absolute Advantage: Ability to produce goods or services more efficiently than another country.
    • Comparative Advantage: Ability to produce goods or services at a lower opportunity cost compared to another country.

    Trade Dependencies

    • Dependent: Relying on external resources or goods for economic stability.
    • Example of dependency: A country with little fertile soil relies heavily on imports for food.

    Specialization and Production

    • Specialization: Focusing on producing limited types of goods or services to enhance efficiency.
    • A country with absolute advantage can produce goods more efficiently, enhancing its export potential.

    Key International Trade Products

    • Middle East: Primarily associated with oil production and trade.
    • Sub-Saharan Africa: Known for specializing in diamonds.

    Import and Export Dynamics

    • Exporting: Sending products abroad; Maine lobsters sent to France as an example.
    • The U.S. imports oil due to insufficient domestic production capacity.

    Opportunity Cost in Trade

    • Opportunity Cost: The cost of forgoing the next best alternative; choosing to export bananas instead of wheat illustrates this concept.
    • A country overly dependent on imports, like one that imports all its oil, highlights risks in trade relationships.

    Efficiency and Economic Strategy

    • Countries strive for absolute advantage to maximize production efficiency and competitiveness in global markets.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Description

    Explore the fundamental concepts of international trade, including absolute and comparative advantage. Understand trade dependencies and the significance of specialization in production. This quiz also addresses key products associated with different regions and dynamics of importing and exporting.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser