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Published byBeryl McDonald Modified over 9 years ago
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Chapter 17
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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
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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
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-Importance of Opportunity Cost - Mutual Benefits
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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
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Effects of Trade Barriers Increased Prices for Foreign Goods Trade Wars Arguments for Protectionism Protecting Jobs Protecting Infant Industries Safeguarding National Security
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Trade Agreements World Trade Organization (WTO) The European Union (EU) NAFTA DR-CAFTA and FTAA
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