Chapter 3 - Interdependence & Gains From Trade

Question 1

Exports

Answer 1

Goods produced domestically & sold abroad

Question 2

Imports

Answer 2

Goods produced abroad & sold domestically

Question 3

Absolute Advantage

Answer 3

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

Question 4

Comparative Advantage

Answer 4

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