Chapter 3: Trade

Question 1

Exports

Answer 1

goods and services produced domestically and sold abroad.

Question 2

Imports

Answer 2

goods and services produced abroad and sold domestically.

Question 3

Absolute Advantage

Answer 3

ability to make goods or services using fewer inputs than another producer.

Question 4

Comparative Advantage

Answer 4

ability to make goods or services at a lower opportunity cost than another producer