Chapter 3

Question 1

Absolute advantage

Answer 1

the ability to produce a good using fewer inputs than another producer

Question 2

Comparitive advantage

Answer 2

the ability to produce a good at a lower opportunity cost than another producer

Question 3

Imports

Answer 3

goods and services that are produced abroad and sold domestically

Question 4

Exports

Answer 4

goods and services that are produced domestically and sold abroad