Unit 7 Vocabulary: 1-20

Question 1

Absolute Advantage

Answer 1

A country has absolute advantage in international trade over others if it is the most efficient producer of that product. That means the country can achieve more output of that product from any given amount of resource inputs than any other produce; basically a country who can produce an item the best or the most (but not the cheapest)

Question 2

Agglomeration

Answer 2

Grouping together of many companies from the same industry in a single area for collective or cooperative use of infrastructure and sharing of labor resources, basically similar companies locate close to each other

Question 3

Break-of-Bulk Point

Answer 3

A location along a transport route where goods must be transferred from one mode of transport to another

Question 4

Bulk Gaining

Answer 4

Products gain weight or size during manufacturing

Question 5

Bulk Reducing

Answer 5

Products lose weight or size during manufacturing

Question 6

Capital

Answer 6

The monetary assets that a business possesses.

Question 7

Commodity Chain

Answer 7

Series of links connecting the many places of production and distribution, resulting in a commodity that is then exchanged on the world market

Question 8

Comparative Advantage

Answer 8

Ability of a country (or place) to produce a good or offer a service at a lower opportunity cost; often times this means the country can produce items cheaper than other countries and the idea suggests countries should produce what they are best at

Question 9

Compressed Modernity

Answer 9

Rapid economic and political change that transforms a country into a stable nation with a democratizing political institution, a growing economy, and an expanding web of nongovernmental institutions

Question 10

Conglomerate Corporations

Answer 10

A company that is composed of many smaller companies that all specialize in one aspect of the company’s product development or sale

Question 11

Cottage Industry

Answer 11

Manufacturing based in homes rather than factories; common before the Industrial Revolution

Question 12

Debt-for-Nature Swap

Answer 12

When a portion of a developing nation’s foreign debt is forgiven in exchange for local investments in environmental conservation measures.

Question 13

Deglomeration

Answer 13

The process of industrial deconcentrating, or moving out, in response to technological advances and/or increasing costs due to congestion and competition, basically this is companies moving away due to saturation

Question 14

Deindustrialization

Answer 14

Process by which companies move industrial jobs to other regions with cheaper labor, leaving the newly deindustrialized region to switch to a service economy and to work through a period of high unemployment

Question 15

Dependency Theory

Answer 15

A theory that suggests the core countries depend on the periphery for labor and raw materials while the periphery depend on the core for goods. This dependency was created because of colonization and suggests the economic development of poorer areas is limited due to these arrangements.

Question 16

Economies of Scale

Answer 16

Economic advantages that come with a larger scale of operations- basically, bigger companies can control their costs more than smaller companies can because they can produce more at less cost

Question 17

Education level

Answer 17

The progression of years of formal educational instruction received and successfully completed, usually based on passing formal exams

Question 18

Entrepot

Answer 18

A port, city, or other center to which goods are brought for import and export, a geographic location used like a warehouse in global trade

Question 19

Export Processing Zones

Answer 19

Zones established by periphery and semi-periphery countries where they offer favorable tax and trade arrangements to attract foreign trade and investments

Question 20

Fair Trade

Answer 20

The movement advocates the payment of a fair price as well as social and environmental standards in areas related to the production of a wide variety of goods, basically it is an economic practice to pay a fair price and wage to workers in LDCs and promote social and environmental sustainability