BUS 200 Lecture Notes - Lecture 23: Win-Win Game, Comparative Advantage, Trade Restriction
Quiz in class week 5
positive sum game
occurs when no one wins at someone else's expense
Ricardo
compares the opportunity costs of producing goods across countries. Related to comparative
advantage which holds that under free trade, an agent will produce more of and consume less
of a good for which they have a comparative advantage.
Trade is a positive sum game
Porters diamond
looks at the sources of competitive advantage. Can be used to analyze a firm's ability to
function in a national market, and analyze a national market's ability to compete in an
international market.
protectionism
the theory or practice of shielding a country's domestic industries from foreign competition by
taxing imports.
administrative barriers
ways govts slow down trade: forms, weird customs, bureaucratic stuff to dissuade ppl from
importing/exporting to a specific country
tariffs
taxes levied on imports that raise the cost of imports relative to domestic products
what tariffs do
Raise govt revenue
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