Chapter 13

Question 1

Autarky

Answer 1

Autarky = economic system of self-sufficiency and limited trade. A country is in “complete state of autarky” if its economy is
closed, meaning that it doesn’t trade with any country

Question 2

Imports = ?
Exports = ?

Answer 2

Imports = goods bought by one country but produced by another one.
Exports = vice versa

Question 3

Absolute advantage (AA) =?

Answer 3

Absolute advantage= ability to produce a good using fewer inputs than another producers

Question 4

Comparative advantage=?

Answer 4

Comparative advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners

Question 5

Protectionism

Answer 5

Protectionism : gov policies restricting trade to protect domestic. industries.

Question 6

Tariff

Answer 6

Tariff : Tax on goods produced abroad and sold domestically.

Question 7

import quotas

Answer 7

Import quotas = limit on the Qt that can be produced abroad and sold domestically