Module 4- Comparative Advantage and Trade

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4 Terms

1
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trade
in a market economy individuals engage in this; meaning they provide goods and services to receive goods and services
2
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comparative advantage
an individual has this when producing a good or service if the opportunity of producing the good or service is lower for that individual than for other people
3
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absolute advantage
an individual has this when in producing a good or service if he or she can make more out of it with a given amount of time and resources
4
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terms of trade
the indication of the rate at which one good can be exchanged for another