Principle of Absolute Advantage Flashcards
1
Q
what is absolute advantage
A
capability to produce the same quantity of outputs with less inputs or a greater quantity of outputs with the same inputs
2
Q
what are the terms of trade
A
the rate at which different commodities exchange for each other between countries. It will lie somehwere between op cost ratio’s for two goods traded
3
Q
how do you calculate op cost of 1 cheese to chocoloate
A
choc/cheese
