International Specialization and Trade

Question 1

A good/service purchased from another country

Answer 1

Import

Question 2

A good/service sold to another country

Answer 2

Export

Question 3

Idea that countries of the world are growing increasingly dependent on one another

Answer 3

Global independence

Question 4

A country exports more than they import. Foreign trade is profitable

Answer 4

Favorable term of trade

Question 5

A country imports more than they export. Foreign trade loses money for the country

Answer 5

Unfavorable term of trade

Question 6

If a country can produce a good/service with far less resources

Answer 6

Absolute advantage

Question 7

If a country can produce a good/service at a lower opportunity cost relative to other countries

Answer 7

Comparative advantage

Question 8

Government intervention/assistance to a firm to:

1. Lower cost of production
2. Lower prices

Answer 8

Subsidy

Question 9

Taxes on the prices of imported goods

Answer 9

Tariffs

Question 10

A limit on the volume of an imported good allowed into a country

Answer 10

Quota

Question 11

A ban on :

1. a certain imported good
2. all imports from a certain country

Answer 11

Embargo

Question 12

The use of trade barriers to discourage importation and protect domestic firms

Answer 12

Protectionism

Question 13

Removing barriers to free trade between countries

Answer 13

Trade liberalization

Question 14

Selling goods in the destination country below cost(of domestic firms)to break into that market

Answer 14

Dumping