self-sefficency: a country that is nor participating in international trade
political and ecomonic policy in the 17th and early 18th centuries ained at increasing a nation's wealth and power by encouraging the export of goos in return for gold
a country that is capable of producing a product with fewer labor hours.
division of labor
the practice of subdividing a production process into stages that can then be performed bt labor repeating the process, as on a production line.
the ability to produce a good or service more cheaply, relative to other goods and services, than is possible in other countries.
Prodctions possiblility frontier
a theoretical mehtod of representing te total productive capablilities of a nation used in the formulation if classical and modern trade theory.
the cost incurred by a form as the result of takinf one acion rather than another
the proportion of capital input to labor input used in the production of a good.
Factor Proportions Theory
systematic explaination of the source of comparative advantage.
the method for estimating market activities and potential that measures the factor inflows into a production and the resultant outflow of products
Wassily Leontief's studies indicated that the united states was a labor abundant country, exporting labor intensive products. This was the paradoxbecause of the general belief that the united states was a capital abundant country that should be exporting capital abundant products.
overlapping ranges of trade targets woth common ground and levels of sophistication
product cycle theory
the thoery that veiws products as passing through four stages
which the location of product move from industrialized to lower cost developing nations
internal economies on scale
when the cost perunit of the product of a single firm continues to fall as the firm's size continues to increase
abandoned product ranges
the outcome of a firm narrowing its range of products to obtain economies of scale, which provides opportunites for other firms to enter the market for the abandoned products
the similtaneous export and inport of the same good by a country. it is of intrest, due to the traditional theory that a country will either export of import a good, but not do both at the same time.
the effort to build unique differences or improvments into products
Foreign Direct investment
the establidhment or expansion of operation of a firm in a foreign country. Like all investments it assumes a transfer of capital
a policy for economics growth adpted by many developing countries that involves the systematic encouragement of domestic production of goods formerly imported
occurs when a firm establishes its own multinationaloperation, keeping information that is at the core of it competitiveness within the firm