Topic 3

Question 1

How does trade help countries grow

Answer 1

Helps each country grow outwards to a point on the PPF line that would have not been attainable without trade

Question 2

Absolute advantage

Answer 2

ability of individual, firm, or country to produce more goods and services than competitors, with the same resources (productivity)

Question 3

Comparative Advantage

Answer 3

ability of individual, firm, or country to produce goods and services at a lower opportunity cost (opportunity cost)

Question 4

trade is based on ….

Answer 4

comparative advantage

Question 5

specialize is something you have …… in

Answer 5

comparative advantage

Question 6

how to calculate opportunity cost

Answer 6

what you sacrifice / what you gain