10.2 Trade Flashcards
1
Q
What is absolute advantage?
A
Absolute advantage is a situation where a country can produce a good or service using fewer resources than that of another country
2
Q
What is comparative advantage?
A
Measured in terms of opportunity cost. The country with the least opportunity cost when producing a good possesses comparative advantage in that good.
3
Q
What are benefits of trade?
A
Increased overall global output Greater competition Employment opportunities Encouragement of specialisation, leading to greater efficiency Improved quality of goods and services
4
Q
What are the drawbacks of trade?
A
Dumping Environmental concerns Over-specialisation Structural unemployment Infant industries
5
Q
What are examples of protectionist policies?
A
Tariffs
Tariffs
