4.1 Globalisation

Question 1

Opportunity cost

Answer 1

Eg Brazil makes coffee US makes wheat
US has lower opportunity cost for making wheat than Brazil

Question 2

Comparative advantage

Answer 2

US has comparative advantage of wheat
Something a country is least bad at producing

Question 3

Absolute advantage

Answer 3

A country has absolute advantage in producing a good over another country if it uses fewer resources to produce that good
Eg if saudi can produce oil and corn more efficiently than the us but can only produce 100 barrels of oil or 100 bushels of corn the opportunity cost for oil is the loss of 0.25 corn
If the US lost a bushel of corn by producing a barrel of oil the US has a comparative but not absolute advantage in corn

Basically
When a country requires fewer resources to produce goods compared to another