Microeconomics Quiz - Comparative and Absolute Advantage

Free trade

the movement of goods and services among nations without political or economic barriers

International trade

the exchange of goods and services among nations

Absolute advantage

the ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources

Comparative advantage

the ability to produce a good at a lower opportunity cost than another producer

Output problem

who can make more of a resource, want a higher number

Input problem

who can produce goods quicker, want a lower number

Calculating an output problem

other goes over (OOO)

Calculating an input problem

other goes under

Terms of trade

indicate the rate at which one good can be exchanged for another