Economics Chapter 3

Question 1

Can trade make you be able to consume more than you did before?

Answer 1

Yes

Question 2

What is Absolute Advantage?

Answer 2

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

Question 3

What is Opportunity Cost?

Answer 3

Whatever must be given up to obtain some item

Question 4

What is Comparative Cost?

Answer 4

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

Question 5

Can a firm have both absolute and comparative cost?

Answer 5

A firm can have absolute cost in both items but impossible to have comparative advantage in both items (when comparing two items from two firms)

Question 6

For both parties to gain from trade, what does the price need to be?

Answer 6

The price at which they trade must lie between their opportunity cost

Question 7

Can trade with other countries also cause downfalls for people with certain jobs?

Answer 7

Yes

Question 8

What are imports?

Answer 8

Goods produced aboard and sold domestically

Question 9

What are exports?

Answer 9

Goods produced domestically and sold aboard