MKT 310 Study Guide - Midterm Guide: New Trade Theory, Win-Win Game, Absolute Advantage
Document Summary
Latino refers to geography while hispanic refers to language. Mercantilism: an economic philosophy advocating that countries should simultaneously encourage exports and discourage imports: mercantilists argue that it is in a (cid:272)ou(cid:374)try"s (cid:271)est i(cid:374)terest to ru(cid:374) a (cid:271)ala(cid:374)(cid:272)e of trade surplus. France has comparative advantage (find the country that is closer to a. 1:1 ratio) in cloth because it is harder for germany to produce cloth: heckscher-ohlin theory (factor proportions theory): argues that the pattern of international trade (comparative advantage) is determined by differences in factor endowments. In an increasingly integrated global economy, the product life-cycle theory seems to be less predictive than it once was. Products and its associated manufacturing technologies go through stages of evolution: introduction, growth, and maturity. The variety of goods available to consumers in each nation is increased while the average costs of those goods falls.
