lesson 3 - comp advantage Flashcards
1
Q
absolute advantage
A
the ability to produce more of a good than another entity given the same resources
2
Q
comparative advantage
A
you give up less to produce
3
Q
specialization
A
when an entity allocates resources towards the production of one good or service
4
Q
trade
A
the exchange of goods, services, resources between agents
5
Q
international trade
A
the exchange between countries
6
Q
gains from trade
A
the ability of two agents to increase consumption by specialization
7
Q
terms of trade
A
the price of one good in terms of the other that countries agree on
