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6 Cards in this Set
- Front
- Back
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Absolute Advantage
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the ability to produce a good using fewer inputs than another producer
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Opportunity Cost
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Whatever must be given up to obtain some item
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Comparative Advantage
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The ability to produce a good at a lower opportunity cost than another producer
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Specialization
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Producers produce only what they have the comparative advantage in.
When each person specializes in producing the good for which he or she has a comparative advantage, total production in the economy rises. |
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Imports
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good produced abroad and sold domestically
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Exports
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goods produced domestically and sold abroad
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