Chapter 3 - The Specific-Factors Model Flashcards
(9 cards)
1
Q
specific-factors model
A
analyzes the role of international trade in determining the earnings of labor, land and capital.
2
Q
diminishing returns
A
the marginal product of labor declines as the amount of labor used in the industry increases
3
Q
autarky
A
no trade
4
Q
embargo
A
a complete stop to trade
5
Q
real wage
A
wages adjusted for inflation; wages in terms of what the goods it can buy
6
Q
Trade Adjustment Assistance (TAA)
A
compensation for workers who lost their jobs because of import competition
7
Q
services
A
wholesale and retail trade, finance, law, information technology, education, etc
8
Q
rental on capital
A
Rk; reflects how much the capital makes during a period when it used
9
Q
rental on land
A
Rt; reflects how much the land makes during a period when it is used
