4.1.2 - Specialisation and trade

Question 1

Name two types of Advantages

Answer 1

. Absolute Advantage
. Comparative Advantage

Question 2

Define Absolute Advantage

Answer 2

. when a country is able to produce a good or service more cheaply in absolute terms that another country

Question 3

Define Comparative Advantage

Answer 3

. when a country producers a good or service at a lower opportunity cost than another country