Unit 5 Test Review

Front

When one producer has a lower opportunity cost in production than other producers

Back

comparative advantage

Front

When one entity can either produce more overall output with given inputs, or use less overall inputs to produce a given output

Back

absolute advantage

Front

Increases efficiency and combined output, which allows nations to consume beyond their own production capabilities

Back

specialization

Front

The unrestricted flow of goods, services, and productive resources between countries

Back

free trade

Front

Laws passed or actions taken by the government of a country with the intention of restricting the flow of goods and services between itself and another country or countries

Back

trade barrier

Front

A policy of establishing trade barriers

Back

protectionism

Front

A general concern about using any trade barrier is the possible retaliation of the other country, which could cause a......

Back

trade war

Front

A complete ban on trade with a country (usually due to political disputes)

Back

embargo

Front

Limits on the quantity of goods that can be imported into a country

Back

quotas

Front

Government payments to domestic producers that help the domestic companies compete with producers in other nations

Back

subsidies