| A | B |
|---|
| autarky | self-sufficiency: a country that is not participating in int'l trade |
| mercantilism | pol/economic policy in 17-18th C aimed at inc. nation's wealth&power by encouraging export of goods in return for gold |
| absolute advantage | country capable of producing product w/fewer labor hours |
| division of labor | practice of subdividing production process into stages performed by labor repeating process, as on production line |
| comparative advantage | ability to produce g/s more cheaply, relative to other g/s, than possible in other countries |
| production possibilities frontier | theoretical method of representing tot productive capabilities of nation used in formulation of classical and modern trade theory |
| opportunity cost | cost incurred by firm as result of taking one action rather than another |
| factor intensities | proportion of capital input to labor input used in production of good |
| factor proportions theory | sys. explanation of source of comp. adv. based on resources of country (l&c) |
| input-output analysis | method for estimating mkt activities&potential that measures factor inflows into production&outflow of products |
| Leontief Paradox | Belief that US was capital-abundant country that should be exporting capital-intensive products |
| market segment | overlapping ranges of trade targets w/common ground and levels of sophistication |
| product cycle theory | 4 stages (intro, growth, maturity, decline); production from industrialized to lower-cost developing nations |
| internal economies of scale | When cost/unit of product of single firm continues to fall as firm's size continues to increase |
| abandoned product ranges | firm narrowing range of products to obtain economies of scale; provides opportunities for other firms to enter market |
| intra-industry trade | export/import of same good by country |
| product differentiation | effort to build unique differences or improvements into products |
| foreign direct investment | establishment or expansion of operations of firm in foreign country; assumes xfer of capital |
| import substitution | policy for econ growth adopted by developing countries that involves systematic encouragement of domestic production of goods formerly imported |
| internalization | firm establishes own multinat'l operation, keeping info at core of competitiveness w/in firm |
