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Exporting and Importing definitions

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  • Autarky
    A situation where a country does not engage in international trade, relying solely on its own supply and demand.
  • Comparative Advantage
    The ability to produce a good at a lower opportunity cost than others, driving international trade decisions.
  • Domestic Price
    The equilibrium price determined by supply and demand within a country, before international trade occurs.
  • World Price
    The prevailing price for a good in the global market, which becomes relevant when a country opens to trade.
  • Export
    A good produced within a country and sold to buyers in foreign markets, often when world price exceeds domestic price.
  • Import
    A good produced abroad and purchased by domestic consumers, typically when world price is below domestic price.
  • Producer Surplus
    The area between the supply curve and the market price, representing gains to sellers from trade.
  • Consumer Surplus
    The area between the demand curve and the market price, showing benefits to buyers from trade.
  • Total Surplus
    The sum of consumer and producer surplus, indicating overall economic welfare in a market.
  • Equilibrium
    The point where domestic supply equals domestic demand, setting the initial price and quantity before trade.
  • Surplus
    The excess of quantity supplied over quantity demanded at a given price, which can be exported in open trade.
  • Shortage
    The excess of quantity demanded over quantity supplied at a given price, filled by imports in open trade.
  • Gains from Trade
    The increase in national economic welfare resulting from international exchange, even if some groups lose.
  • Domestic Supply
    The quantity of a good provided by producers within a country, forming part of the market analysis.
  • Domestic Demand
    The quantity of a good desired by consumers within a country, used to assess market outcomes.