Macroeconomics, Chapter 2

__________ advantage is the ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources.

absolute

We can use a simple economic model called the ____________ to see how participants in markets are linked.

circular-flow diagram

The basis for trade is _________ advantage.

comparative

__________ advantage is the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.

comparative

Comparative advantage is the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than _________

competitors

________ are suppliers of goods and services.

firms

A ________ market exists when the government places few restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed

free

A free market exists when the ___________ places few restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed

government

__________ are suppliers of factors of​ production.

houeholds

A ________ consists of all the individuals in a home.

household

A free market exists when the government places few restrictions on ________ a good or a service can be produced or sold or on _______ a factor of production can be employed

how, how

Comparative advantage is the ability of an individual, a firm, or a country to produce a good or service at a _________ opportunity cost than competitors.

lower

Absolute advantage is the ability of an individual, a firm, or a country to produce _______ of a good or service than competitors, using the same amount of resources.

more

Comparative advantage is the ability of an individual, a firm, or a country to produce a good or service at a lower __________ cost than competitors.

opportunity

Absolute advantage is the ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the _________ amount of resources.

same

The basis for ________ is comparative advantage.

trade