Lesson 40 pg. 117 - 121

Question 1

Define geographic specialization

Answer 1

geographic specialization - the production of goods in which a country or region has absolute or comparative advantage

Question 2

When does geographic specialization occur?

Answer 2

Geographic specialization occurs when an area realizes that it is advantageous to produce different goods and to exchange these products for those of other areas

Question 3

Define protectionism

Answer 3

protectionism - the theory that domestic manufacturers need government protection against foreign competitors

Question 4

Describe who David Ricardo was

Answer 4

David Ricardo
>known as the “Advocate of the Principle of Comparative Advantage”
>from being successful in business, he was able to retire by age 42
>after retirement, he won a seat in the English House of Commons where he championed the cause of free trade among nations
>warned of the dangers of protectionism

Question 5

What is one important cause of America’s prosperity in terms of geographic specialization?

Answer 5

One important cause of America’s prosperity is the fact that within the immense trading area of the United States, geographic specialization has led to a greater abundance of goods at lower prices than if the people in each state were compelled to produce for themselves all the things that they wanted.

Question 6

Define free trade

Answer 6

free trade - whenever there are no restrictions or penalties placed upon the exchange of goods

Question 7

Define tariffs

Answer 7

tariffs - taxes that must be paid on imported goods before they are allowed to enter an area