International Trade I

Flashcards covering key concepts from Lecture 11, including PPF, gains from trade, and comparative advantage.

Production Possibilities Frontier (PPF)

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.).

Efficient Outcomes

Producing the maximum output possible given current inputs; operating on the PPF.

Absolute Advantage

The ability to produce more of a good or service than competitors, using the same amount of resources.

Comparative Advantage

The ability to produce a good or service at a lower opportunity cost than other producers.

Opportunity Costs

The value of the next best alternative when making a decision.