ch 3

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The flashcards below were created by user jillmray on FreezingBlue Flashcards.

absolute advantage
- ability to produce a good using fewer inputs than another producer
- if each country has an abs advantage in one good & specializes in that good then both countries can gain from trade
comparitive advantage

ability to produce a good at a lower opp cost than another producer
when finding the opportunity cost
- put item they ask for on the bottom
- if the give you one items opp cost then the reciprical is the opp cost of the other item
any point on a countrys ppf represents

a combo of two goods that an eco can produce using all available resources and technology
unemployment would cause an eco to

produce inside its ppf
trade between countries

allows each country to consume at a point outside its ppf