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5 Cards in this Set

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The ability of a country to produce a specific good at a lower opportunity cost than its trading partners.

I.e. the US has a ______ ______ in bread production because less wine has to be given up to produce bread in the US than in France. In other words, the opportunity costs of brea production are lower in the US than in France.
Comparative advantage
The ability of a country to produce a specific good with fewer recources (per unit of output) than other countries.
Absolute advantage
The rate at which goods are exchanged; the amount of good A given up for good B in value.
Terms of trade
Tariffs reduce the flow of imports by raising import prices. The same outcome can be attained more directly by imposing ____ ____, numerical restrictions on the quantity of a particular good that may be imported.
Import quota
The amount by which the value of imports exceeds the value of exports in a given time period.
Trade deficit