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Hence, as intra-industry trade has developed many economists have looked at other explanations. One attempt to explain IIT was made by Finger (1975), who thought that occurrence of intra-industry trade was “unremarkable” as existing classifications place goods of heterogeneous factor endowments in a single industry.
A related but different everyday usage occurs in the sentence "He makes a lot of money." This refers to a variable that economists call income. Unlike the usages mentioned above, this one has the units "dollars, or another currency, per unit of time", where the unit of time might be a week, month, or year, making it a flow variable.
Trade in goods and services can serve as a substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example of this is the import of labor-intensive goods by the United States from China. Instead of importing ...
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
The concept is thought to be useful for ascertaining the amount of adjustment costs associated with changing trade flows or the degree to which changes in trade might be responsible for changes in the distribution of income. Several formulas have been proposed to quantify this concept but the most widely used is that of Shelburne (1993). [1]
The economic theory of international trade differs from the remainder of economic theory mainly because of the comparatively limited international mobility of the capital and labour. [6] In that respect, it would appear to differ in degree rather than in principle from the trade between remote regions in one country.
By this time in the product’s life cycle, the characteristics of the product itself and of the production process are well known; the product is familiar to consumers and the production process to producers. This occurs when the product peaks in the maturity stage and then begins a downward slide in sales.
The fundamental assertion is that there is a maximum amount that "a consumer will give up, of one commodity, to get one unit of another good, in that amount which will leave the consumer indifferent between the new and old situations" [9] The negative slope of the indifference curves represents the willingness of the consumer to make a trade ...