Econ Unit 2 Flashcards

Front

Absolute Advantage

Back

The ability to produce more of a good than another country using the same amount of resources. (e.g., Country A produces more coal than Country B).

Front

Comparative Advantage

Back

The ability to produce a good at a lower opportunity cost than another country. This is the basis for specialization.

Front

What is the result of trade between two nations?

Back

It is mutually beneficial.

Front

How does international trade affect the likelihood of conflict?

Back

It decreases the chance of conflict between countries.

Front

What is a "free-trader"?

Back

Someone who believes in the free flow of goods between countries without barriers.

Front

What is an example of an agreement a free-trader would support?

Back

NAFTA (North American Free Trade Agreement).

Front

What is "Protectionism"?

Back

The policy of protecting domestic industries from foreign competition using trade barriers.

Front

Trade Barriers

Back

Restrictions on trade designed to reduce foreign competition.

Front

Tariffs

Back

A tax placed on imported goods.

Front

Quotas

Back

A limit on the amount of a good that can be imported.