Flashcards
Week 7
Cards in this deck (23)
- 1absolute advantagethe ability to produce a good using fewer inputs (lower cost) than another producer
- 2comparative advantagethe ability to produce a good at a lower opportunity cost than another producer
- 3consumption frontier (CF)The various alternative combinations of the commodities that a nation can consume
- 4production frontier (pf)The maximum output of two competing commodities at different levels of production.
- 5what does it mean when (cf) is above (pf)party is better off after specialization
- 6specializationthe concentration of the productive efforts of individuals and firms on specific types of work
- 7bargaining powerAbility to extract favorable outcome from negotiations due to one party's strengths.
- 8reservation optionthe next best alternative
- 9capital intensiveusing more capital than labor in the production process
- 10labour intensiveinvolving a high level of labour input compared to capital equipment
- 11capital abundanta higher level of capital per worker in one country relative to another (richer in machinery, equipment etc.)
- 12what do tariffs do?taxes on imports effectively discriminate against foreign produced goods
- 13what do immigration policies do?regulate the movement of people between nations that is not possible within nations.
- 14what do capital controls do?limits on the ability of individuals or firms to transfer financial assets among countries
- 15what do monetary policies do?affect the exchange rate hence the relative price of imported and exported goods
- 16what are some policies taken by the government to control effects of globalisation on the economy?tariffs, immigration policies, monetary policy, capital controls
- 17Rodrik's Trilemmait is impossible for countries to simultaneously achieve:
(a) Hyper-globalization - no political or cultural barriers to the flow of goods and investment
(b) Sovereignty - pursue the policies that it chooses
(c) Democracy - liberty and equality - 18why can we not have hyper-globalization if we have (a) national sovereignty and (b) democracy?national policies of stabilization, environmental protection and redistribution require limits on movement of labor and capital which is the opposite of globalization
- 19why can we not have democracy if we have (a) hyper-globalization and (b) national sovereignty?hyper-globalization policies unpopular with voters as they increase economic insecurity, weaken labor rights and environmental protection
- 20why can we not have national sovereignty if we have (a) hyper-globalization and (b) democracy?globalization policy demands are different from national policies so effective global governance is inconsistent with complete national sovereignt
- 21how does globalization promote growth?Competition with foreign firms accelerates the rate of technological progress
economies of scale due to foreign demand allows for lower-cost production, which benefits workers, owners, and buyers - 22how does globalization prevent growth?Disadvantageous specialization - specializing in low-innovation sectors can slow growth
Learning by doing in infant industries - may need temporary tariff protection - 23Why have some countries benefited more from globalization than others?Economic success depends on how well
policies have managed growth due to
economic integration
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- 1 ECO2004S Flashcards on Week 7, created by Tendai Murove on 13/10/2021.
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- Tendai Murove
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