Week 2- Interdependence and the Gains from Trade

Question 1

Sellers-

Answer 1

Providing goods and services to make a living.

Question 2

Comparative Advantage-

Answer 2

One that good at something and can do it better than the other. Therefore, gives company the ability to sell goods at lower price since they’re better at it.

Question 3

Absolute advantage-

Answer 3

Producer requires smaller quantity to produce a good will have an absolute advantage.

Question 4

“You and millions of other people are interdependent”

Answer 4

We all rely on one another.

Question 5

Benefit from specialization-

Answer 5

We can obtain goods at lower price and opportunity cost.