AP Macroeconomics: Unit 1 - Module 4: Comparative Advantage And Trade

opportunity cost

As long as people have different _____, everyone has a comparative advantage in something, and a comparative disadvantage in something.

less

People are willing to trade if the "price" of the good each person is obtaining from trade is _____ than his opportunity cost of producing the good himself.

Comparative advantage

The production possibilities curve model is useful for illustrating gains from trade: trade based on _____.

Specialization

_____ is a situation in which people engage in a different task that he or she is good at performing.

Absolute Advantage

_____ is when an individual can make more of a good or service with a given amount of time and resources.

Gains from Trade, specialization

_____ is when people can get more of what they want through trade than they could if they tried to be self-sufficient. It arrises from _____.

Comparative Advantage

_____ is when the opportunity cost is lower for the individual than for the other people.

Trade

_____ provides goods and services to others and receives goods and services in return.

Markets

are what allow someone to specialize in their respective fields