1. Chapter 17

2.  Resource Distribution and Specialization  Natural Resources  Capital and Labor  Unequal Resource Distribution  Specialization and Trade ▪ Export – good or service sent to another country ▪ Import – good or service brought in from another country

3.  Absolute Advantage  The ability to produce more of a given product using a given amount of resources  Comparative Advantage  The ability to produce a product most efficiently given all the other products that could be produced

4. -Importance of Opportunity Cost - Mutual Benefits

5.  Trade Barriers  Trade restriction ▪ Tariff – tax on imported goods ▪ Quotas and VERS – cap on amount that can be imported/ voluntary export restraint ▪ Licenses, Regulations, Sanctions, Embargos

6.  Effects of Trade Barriers  Increased Prices for Foreign Goods  Trade Wars  Arguments for Protectionism  Protecting Jobs  Protecting Infant Industries  Safeguarding National Security

7.  Trade Agreements  World Trade Organization (WTO)  The European Union (EU)  NAFTA  DR-CAFTA and FTAA