Exports
: Goods or services that are produced domestically but sold abroad.
What is it called when a country buys goods and services from another country?
Imports
. Goods and services that a country buys from another country. Exports.
What are goods produced domestically and sold abroad?
Goods produced abroad and sold domestically are called
exports
and goods produced domestically and sold abroad are called imports.
When a domestic country is small relative to world markets?
Since the domestic country is small relative to world markets,
it is a price taker and its consumption and production do not affect the world price
. Thus the country adopts the world price for any good, service, or resource as the domestic price.
Is the income earned by whoever?
Terms in this set (21) The income earned by whoever has the right to import the
good
at world price and sell it in the domestic market at the higher quota price. The dollar value of a quota rent is equal to the size of the quota times the difference between the quota price and the world price.
What must be given up to obtain an item is called?
Economists use the term
opportunity cost
to indicate what must be given up to obtain something that’s desired. … The idea behind opportunity cost is that the cost of one item is the lost opportunity to do or consume something else; in short, opportunity cost is the value of the next best alternative.
When two countries trade with one another it is most likely because?
Question: When two countries trade with one another, it is most likely because a.
the wealthy people in each of the two countries are able to benefit, through trade, by taking advantage of other people who are poor
.
Why are imports important to a country?
Imports are important for the economy because
they allow a country to supply nonexistent, scarce, high cost or low quality of certain products or services
, to its market with products from other countries.
What are examples of import?
The definition of import is to introduce or bring goods from one country to be sold in another. An example of import is
introducing a friend from another country to deep fried Twinkies
. An example of import is a shop owner bringing artwork back from Indonesia to sell at their San Francisco shop.
What are items bought from other countries called?
Imports
are items bought from other countries.
What is import tax called?
A tariff or duty
(the words are used interchangeably) is a tax levied by governments on the value including freight and insurance of imported products.
What is created when trade occurs?
Trade creation refers to
the increase in economic welfare from joining a free trade area
, such as a customs union. Trade creation will occur when there is a reduction in tariff barriers, leading to lower prices. This switch to lower cost producers will lead to an increase in consumer surplus and economic welfare.
How do quotas help domestic producers?
A quota
sets a numerical limit on how much of a product can be imported into a country
. This helps to protect producers of domestic products from facing too much competition and ultimately going out of business.
When a market is not allowed to adjust to the equilibrium price and quantity traded some economic Blank will be lost?
deadweight loss
is the: value of the economic surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium.
Is based on relative opportunity cost?
Opportunity cost is expressed in relative price, that is,
the price of one choice relative to the price of another
. For example, if milk costs $4 per gallon and bread costs $2 per loaf, then the relative price of milk is 2 loaves of bread.
What are the three basic tax forms discussed in this section?
There are three personal income tax forms —
1040, 1040A and 1040EZ
— with each designed to get the appropriate amount of your money to the IRS.
