chp5 trade Flashcards
1
Q
absolute advantage
A
Produce only goods where you are most efficient, trade for those where you are not efficient.
2
Q
Comparative Advantage Ricardo
A
countries should Produce and export goods relatively more productive than other countries
3
Q
Product Life Cycle (Vernon)
A
Comparative advantage initially resides with the lead innovation nation and go to others as the product goes through its life cycle stages
4
Q
Porter’s Diamond Theory
A
Competitive advantage of certain industries in different nations
5
Q
Hecksher-Ohlin Theorem
A
factor endowments
6
Q
Why do countries have advantages in different goods?
A
> they have different factor endowments
7
Q
Why Do Countries Trade
A
specialization and trade leads to greater overall welfare
