Exam-3-Reading - Exam3Reading:Chapter16:07:00...

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Exam 3 Reading: Chapter 17                 25/11/2007 16:07:00 International Trade     Imports:  Goods and services purchased from other countries. Exports:  Goods and service sold to other countries. Ricardian Model of International Trade:  Analyzes international trade under the  assumption that opportunity costs are constant. Autarky:  A situation in which a country cannot trade with other countries. Factor intensity:  Of production of a good is a measure of which factor is used in  relatively greater quantities than other factors in production. Heckscher-Ohlin model:  A country has a comparative advantage in a good  whose production is intensive in the factors that are abundantly available in that country. The Effects of imports     Domestic Demand Curve:  Shows how the quantity of a good demanded by  domestic consumers depends on the price of that good. Domestic Supply Curve:  Shows how the quantity of a good supplied by  domestic producers depends on the price of that good. World Price:  Of a good is the price at which that good can be bough or sold  abroad. International Trade and Factor Markets     Exporting Industries:  Produce goods and services that are sold abroad. Import-competing industries:  Produce goods and services that are also  imported.
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International trade tends to increase the demand for factors that are abundant   in our country compared with other countries, and to decrease the demand   for factors that are scarce in our country compared with other countries.  As a  
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Exam-3-Reading - Exam3Reading:Chapter16:07:00...

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