Topic 3 Flashcards
1
Q
How does trade help countries grow
A
Helps each country grow outwards to a point on the PPF line that would have not been attainable without trade
2
Q
Absolute advantage
A
ability of individual, firm, or country to produce more goods and services than competitors, with the same resources (productivity)
3
Q
Comparative Advantage
A
ability of individual, firm, or country to produce goods and services at a lower opportunity cost (opportunity cost)
4
Q
trade is based on ….
A
comparative advantage
5
Q
specialize is something you have …… in
A
comparative advantage
6
Q
how to calculate opportunity cost
A
what you sacrifice / what you gain
