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A2 Business terms

Absolute advantage exists if the real resource cost of a product is lower in one country than

Centrally planned economies were those in which all of most economics decision were taken
by governments. Planning involved deciding on the inputs to be used, the production targets and…

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Free trade areas are groups of countries that trade completely freely with each other, with no
trade barriers, but each member country retains its own independent trade policies in relation to
the rest of the world.

Geocentric approach sees the world as a potential market with both similarities and differences…

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Market saturation occurs when it becomes impossible to expand sales any further in that
particular market. If the product is a durable good, e.g. a washing machine, it may still be
possible to sell replacement machines.

Market share is the percentage of total sales of one particular product that comes…

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Technology transfer refers to the way in which countries with limited access to new
technologies may acquire expertise when multinational companies locate there.

Trade creation occurs when there is an increase in the total amount of goods and services
traded because of reduced trade restrictions within a trade block.



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