Retrieval Activity - Specialisation and Trade

Here is a Quizlet retrieval activity covering specialisation and trade.

• Absolute advantage - Occurs when a county can produce a product using fewer resources than another nation
• Bi-lateral trade agreement- Agreement to lower import tariffs and other trade barriers between two countries
• Closed economy - An economy operating without imports and exports
• Comparative advantage - Occurs when a country can benefit from specialising in and exporting the product(s) for which it has the lowest opportunity cost of supply
• Competitiveness - Sustained ability to sell goods and services profitably at competitive prices in a foreign country
• Containerisation - System of freight transport for use in shipping that has reduced transport costs of shipping across the globe.
• Dynamic gains from trade - Diffusion of knowledge and technology, economies of scale and increased competition and innovation
• Free trade - When trade in goods and services between nations is allowed to occur without any form of import restriction.
• Intra-regional trade - Exchange of virtually identical products between countries within the same region.
• Mercantilism - Notion that the wealth of a nation was based on how much it could export in excess of its imports, and thereby accumulate precious metals.
• Open economy - Economy with low tariff and non-tariff barriers which is deeply integrated into the regional and global economy.
• Relative export prices - A country's export prices relative to those of a competing economy.
• Specialisation - When individuals, regions or countries concentrate on making one product to create a surplus to trade.
• Trade creation - Movement from a higher cost source of output to a lower cost source of supply as a result of joining a trade agreement.
• Trade diversion - Switch from a lower-cost foreign source/supplier outside of a customs union towards a higher-cost supplier located inside the customs union.
• Trading bloc - A group of countries co-operating to liberalise trade between each other.