How nations benefit from trade?
When nations are able to specialize and trade with each other, they are able to expand their PPF curve, essentially producing beyond what their resources alone are able to produce.
Absolute advantage - when a nation can produce more of something than another nation.
Comparative advantage - when a nation can produce something at a lower cost than another nation - the opportunity cost of production is lower than other nations.
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If doubling the quantity of inputs more than doubles the quantity of outputs, the firm is experiencing
a. increasing returns to scale. b. decreasing returns to scale. c. constant returns to scale. d. increasing costs per unit of output.
A way in which government can attempt to solve the problems caused by information asymmetry in the marketplace is:
A. screening. B. building a reputation. C. disclosure laws. D. statistical discrimination.