BUS 313 CHP2

An important insight of international trade theory is that when countries exchange goods and services one with the​ other, it

Benefits both countries, usually not equally beneficial to both countries.

The potential for gains from the rearrangement of production among countries is due to

differing opportunity costs

The Ricardian trade model put forth by British economist David Ricardo nearly two centuries ago is one that

expounds principles still valid in​ today's world.

Economists use the term opportunity cost to refer to

the value of the next best alternative occurring as a result of making a particular choice.