International Trade

Question 1

What is international trade?

Answer 1

This is the exchange of goods & services between different countries.

Question 2

Countries that are famous for producing specific goods and services have advantages such as:

Answer 2

Available natural resources
Larger population
Available Technology

Question 3

What is the definition of absolute advantage?

Answer 3

This is a country that has an absolute advantage when it is able to create goods & services more efficiently than another country.

Question 4

What is Comparative advantage?

Answer 4

A country that has a comparative advantage over another when the opportunity cost of giving up a product is lower than the other country

Question 5

What is an opportunity cost?

Answer 5

When resources are limited people are forced to make choices sometimes giving up an option in exchange for another, the option given up is the opportunity cost

Question 6

What is specialization?

Answer 6

this is to concentrate your resources(time, money, labor, etc.) on the creation of a single good or a few goods & services.