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INTERNATIONAL TRADES AND AGREEMENT > PART 3 > Flashcards

PART 3 Flashcards

1
Q

SPECIFIC FACTORS MODEL
first developed by ______(1892-1970)

A

Jacob Viner

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2
Q

SPECIFIC FACTORS MODEL
further developed by _______

A

Paul Samuelson and Ronald Jones

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3
Q

assumes an economy produces two goods and that can allocate its labor supply between the two sectors

A

SPECIFIC FACTORS MODEL

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4
Q

allows for the existence of factors of production besides labor. Whereas labor is a mobile factor that can move between sectors, other factors are assumed to be specific

A

SPECIFIC FACTORS MODEL

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5
Q

is one that is stuck in an industry or is immobile between industries in response to changes in market conditions.

A

Specific Factors

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6
Q

Specific Factors

A

Land, Capital

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7
Q

Mobile Factors

A

labor

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8
Q

ability to move factors of production out of one production process into another

A

Factor Mobility

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9
Q

The percentage of the labor force that is unemployed

Situation where a person actively searches for employment but is unable to find work

A

Unemployment

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10
Q

It occurs when people voluntarily change jobs

A

Frictional Unemployment

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11
Q

Similarly, graduates just starting to look for jobs to enter the workforce add to _______

A

Frictional Unemployment

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12
Q

Searching for a new job, recruiting new workers, and matching the right workers to the right jobs all take time and effort.

A

Frictional Unemployment

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13
Q

Variation in the number of unemployed workers over the course of economic upturns and downturns

A

Cyclical Unemployment

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14
Q

Unemployment rises during recessionary periods and declines during periods of economic growth

A

Cyclical Unemployment

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15
Q

Comes about through a technological change in the structure of the economy in which labor markets operate

A

Structural Unemployment

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16
Q

Technological changes can lead to unemployment among workers displaced from jobs that are no longer needed

A

Structural Unemployment

17
Q

Shows the maximum amount of output that can be produced in an industry

A

Concept 1: Production Function

18
Q

Concept 1: Production Function
FORMULA

A

Qp=f(Kp,Lp)
Qr=f(Kr,Lr)

19
Q

Predicts that after some optimal level of capacity is reached, adding an additional factor of production will actually result in smaller increases in output

A

Concept 2: Law of Diminishing Returns (Law of Diminishing Product)

20
Q

Concept 2: Law of Diminishing Returns (Law of Diminishing Marginal Product)

FORMULA

A

Marginal product of labor (MPL)- down

Labor (L_-up

K is fixed

21
Q

change in output that results from complying an added unit of labor

A

Marginal product of labor

22
Q

At the start, every unit of input leads to the productive gains

A

Productive phase

23
Q

Upon hitting the point of _______ , every additional input will give you a slower gain in output

A

Diminishing returns

24
Q

If you reach this phase, every additional input will give you negative returns

A

Negative Returns

25
Q

Concept 3: Slope of the Production Function
FORMULA

A

Marginal product of labor pizza in the pizza industry (MPLp)= Change in pizza production/ Change in labor units in the pizza industry

26
Q

Concept 4: Labor Constraints
FORMULA

A

L=Lp+Lr

27
Q

A graph that shows the combinations of output that the economy can possibly produce given the available factors of production

A

Concept 5: PPF

28
Q

CONCEPTS IN TWO FACTORS (ONE SPECIFIC AND ONE MOBILE)

A

Concept 1: Production Function
Concept 2: Law of Diminishing Returns (Law of Diminishing Product)
Concept 3: Slope of the Production Function
Concept 4: Labor Constraints
Concept 5: PPF

29
Q

illustrates the combinations of goods that can be produced with given resources and technology.

A

Production Possibility Frontier (PPF)

30
Q

_____ can move between industries, seeking higher wages. However, ______ cannot move between industries because they are specific to certain sectors

A

Labor

capital and land

31
Q

The model predicts that trade will occur when countries specialize in producing the goods that use their abundant factor intensively. This specialization leads to gains from trade.

A

Trade Equilibrium

INTERNATIONAL TRADES AND AGREEMENT (3 decks)

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