Notes On Economics And International Trade Theory

1. Scarcity: Insufficiency or shortness of supply; dearth. 2. Opportunity Cost: The money or other benefits lost when pursuing a particular course of action instead of a mutually-exclusive alternative 3.Supply: The quantity of a commodity that is in the market and available for purchase or that is available for purchase at a particular price. 4. Demand: The desire to purchase, coupled with the power to do so; the quantity of goods that buyers will take at a particular price. 5. Price: The quantity of payment or compensation given by one party to another in return for goods or services. 6. Absolute Advantage: An economy can produce a good for lower costs than another. It means that less resources are needed to produce the same amount of goods. 7. Comparative Advantage: The benefit or advantage of an economy to be able to produce a commodity at a lesser opportunity cost than other entities is referred to as comparative advantage in international trade theory. 8. Import: A good or service brought into one country from another. Along with exports, imports form the backbone of international trade. The higher the value of imports entering a country, compared to the value of exports, the more negative that country s balance of trade becomes. 9. Export: A function of international trade whereby goods produced in one country are shipped to another country for future sale or trade. 10. Free trade: Also called laissez-faire, a policy by which a government does notShow MoreRelatedThe Theory Of The International System1741 Words   |  7 Pagesof the strongest proponents of these changes. The study of the international system is comprised of many differing theories. These theories hypothesize the origin of international structure, events, and how states interact. Specifically, the varying theories present in international relations disagree on the causes of war. 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