Chapter 3 - Interdependence and the Gains from Trade

Question 1

Opportunity cost

Answer 1

Whatever must be given up to obtain some item

Question 2

Comparative advantage

Answer 2

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

Question 3

Imports

Answer 3

Goods produced abroad and sold domestically

Question 4

Exports

Answer 4

Goods produced domestically and sold abroad

Question 5

Absolute advantage

Answer 5

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