International Trade

If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

opportunity

The ________ production points on a production possibilities frontier are the points along and inside the production possibilities frontier.

attainable

Trade that is within a country or between countries is based on the principle of

comparative advantage.

A tax imposed by a government on imports of a good into a country is called a

tarrif

Comparative advantage means

the ability to produce a good or service at a lower opportunity cost than any other producer.

The terms of trade refers to

the ratio at which a country can trade its exports for imports from other countries.

Without technological advancement, how can a nation achieve economic growth?

through an increase in supplies of factors of production

If Norwegian workers are more productive than Albanian workers, then trade between Norway and Albania

will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want.

If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden, which of the following would explain this pattern of trade?

Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark has a comparative advantage in producing butter.

Which of the following is the best example of a quota?

a limit on the quantity of residential air conditioners that can be imported from a foreign country

A quota is

a limit placed on the quantity of goods that can be imported into a country.