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start learning
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a country’s ratio of capital inputs to labor inputs
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the distribution of wages earned across a country
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dynamic comparative advantage start learning
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a changing pattern in comparative advantage; governments can establish policies to promote opportunities for changes in comparative advantage over time
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when increasing all inputs by the same proportion results in a greater proportion of total output
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asserts that a country exports those goods that use its abundant factor more intensively
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factor-price equalization start learning
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free trade’s tendency to cause cheap factors of production to become more expensive, and the expensive factors of production to become cheaper
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Heckscher-Ohlin theory differences in relative factor endowments among nations underlie the basis for trade
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increasing returns to scale start learning
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when increasing all inputs by the same proportion results in a total output to increase by a greater proportion
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government policy that is actively involved in creating comparative advantage
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interindustry specialization start learning
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when each nation specializes in a particular industry in which it enjoys a comparative advantage
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the exchange between nations of products of different industries
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intraindustry specialization start learning
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the focusing on the production of particular products or groups of products within a given industry
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intraindustry trade two-way trade in a similar commodity
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the phenomenon of exports being less capital intensive than import-competing goods
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an extension of the Stolper-Samuelson theorem, which suggests that the change in the price of a resource is greater than the change in the price of the good that uses the resource relatively intensively in its production process
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product life cycle theory start learning
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many manufactured goods undergo a predictable trade cycle; during this cycle, the home country initially is an exporter, then loses its competitive advantage vis-à-vis its trading partners, and eventually may become an importer of the commodity
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specific factors factors that cannot move easily from one industry to another
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considers the income-distribution effects of trade when factor inputs are immobile among industries in the short run
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Stolper-Samuelson theorem start learning
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an extension of the theory of factor-price equalization, which states that the export of the product that embodies large amounts of the relatively cheap, abundant resource makes this resource more scarce in the domestic market
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theory of overlapping demands start learning
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nations with similar per capita incomes will have overlapping demand structures and will likely consume similar types of manufactured goods
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start learning
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the costs of moving goods from one nation to another
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