ECS1601 - Economics IB Terms and Correct Definitions

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ECS1601 - Economics IB trade – ANS-Involves the exchange of goods or services between two countries. autarky (self-sufficiency) – -the absence of trade absolute advantage – ANS-Where a coun... try is able to produce more output than other countries using the same input of factors of production. -> Linked to the *specialization* of country to the production of one or a few goods & service. comparative advantage – ANS-Where a country is able to produce a good at a lower opportunity cost of resources than another country. WTO – ANS-An international body that sets the rules for global trading and resolves disputes between its member countries. It also hosts negotiations concerning the reduction of trade barriers between its member nations. barriers to trade – ANS-A variety of methods used to restrict international trade flows, i.e. tariffs, quotas, subsidies, administrative barriers tariff – ANS-A duty (tax) that is placed upon imports to protect domestic industries from foreign competition an/or to raise gov't revenue. -> most common form of trade restriction quota – ANS-Import barriers that set limits on the quantity or value of imports that may be imported into a country. -> usually does not yield gov't revenue subsidy – [Show More]

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