Module 4 Comparative Advantage and Trade
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6 Terms
1
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trade
good and services are provided for goods and services
2
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gains from trade
people can get more of what they want through trade than if they tried being self sufficient
3
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specialization
each person focuses on what they are good at
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comparative advantage
if the opportunity cost for producing the good or service is lower of that for the individual that for other people
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absolute advantage
if individual can produce more with a given amount of time or resources
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terms of trade
indicate the rate at which one good can be exchanged for another that fall between thr proudcers and buyers opportunity cost for the good
Note 
Flashcards (33)