Specialisation and trade (L2) Flashcards
1
Q
FDI
A
foreign direct investment
free movement of labour
2
Q
WTO
A
benefit of trade
3
Q
factor endowment
A
amount of land,labour, capital and entrepreneurship a country has and can exploit for production
4
Q
product differentiation
A
process of distinguishing a product from others so its more attractive to target market
5
Q
absolute advantage
A
produce product with less factors of production than other nations
6
Q
comparative advantage
A
specialise in goods with lowest opportunity cost before trade with other country
7
Q
trick for knowing which part of the graph is comparative
A
side with the bigger gap
8
Q
cons of comparative advantage
A
consumers don’t have perfect knowledge
transport costs + import control distort comparative advantage
rate of inflation ignored
