Trade and Integration Flashcards
1
Q
What is the world trade organisation?
A
An international body responsible for negotiating trade agreements and ‘policing’ the rules of trade to which its members sign up. Trade disputes between members are settled by the WTO.
2
Q
What is absolute advantage?
A
Where one country is able to produce more of a good or service with the same amount of resources, such that the unit cost of production is lower
3
Q
What is comparative advantage?
A
Where one country produces a good or service at a lower relative opportunity cost than others
4
Q
What is relative opportunity cost?
A
The cost of production of one good or service in terms of the sacrificed output of another good or service in one country relative to another
