ap macro - chapter 3

you gon have to review how the ppf graphs work in this chapter cause it easy and i dont want to do THAT much work

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absolute advantage

the ability to produce a good using fewer inputs than another producer

\*\*\*\*\* absolute advantage DOES NOT matter for __**TRADE**__

comparative advantage

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

the price of the trade.

for both parties to gain from trade, the price at which the trade must lie between the two opportunity costs.

imports

goods produced abroad and sold domesticalluy

exports

good produced domestically and sold abroad