chapter 17. resource distribution and specialization natural resources capital and labor unequal...
TRANSCRIPT
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International Trade
Chapter 17
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Absolute and Comparative Advantage
Resource Distribution and Specialization Natural Resources Capital and Labor Unequal Resource Distribution Specialization and Trade▪ Export – good or service sent to another
country▪ Import – good or service brought in from
another country
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Absolute and Comparative Advantage
Absolute Advantage The ability to produce more of a given
product using a given amount of resources
Comparative Advantage The ability to produce a product most
efficiently given all the other products that could be produced
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Absolute and Comparative Advantage
-Importance of Opportunity Cost
- Mutual Benefits
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Trade Barriers and Agreements
Trade Barriers Trade restriction▪ Tariff – tax on imported goods▪ Quotas and VERS – cap on amount that can
be imported/ voluntary export restraint ▪ Licenses, Regulations, Sanctions, Embargos
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Trade Barriers and Agreements
Effects of Trade Barriers Increased Prices for Foreign Goods Trade Wars
Arguments for Protectionism Protecting Jobs Protecting Infant Industries Safeguarding National Security
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Trade Barriers and Agreements
Trade Agreements World Trade Organization (WTO) The European Union (EU) NAFTA DR-CAFTA and FTAA