Unit 4: Global Economics Review

Occurs when production is focused on one or a few goods/services

• Specialization

• Absolute advantage

• Comparative advantage

• Opportunity cost

When a country can produce more of a product than another country

• Specialization

• Absolute advantage

• Comparative advantage

• Opportunity cost

When a country can produce a product at a lower opportunity cost

• Specialization

• Absolute advantage

• Comparative advantage

• Opportunity cost

The sacrifice of the next best alternative

• Specialization

• Absolute advantage

• Comparative advantage

• Opportunity cost

A tax on imported goods

• Tariff

• World Trade Organization (WTO)

• Free traders

• Protectionists

Organization that seeks to remove trade barriers and promote economic development

• Tariff

• World Trade Organization (WTO)

• Free traders

• Protectionists

People who prefer no, or few, trade restrictions

• Tariff

• World Trade Organization (WTO)

• Free traders

• Protectionists

People who favor trade barriers to protect domestic industries

• Tariff

• World Trade Organization (WTO)

• Free traders

• Protectionists

The price of one country's currency in terms of another country's currency

• Foreign exchange rate

• Fixed exchange rate

• Floating exchange rate

• Quota

Forces of supply and demand establish value of the currency

• Foreign exchange rate

• Fixed exchange rate

• Floating exchange rate

• Quota