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5 Cards in this Set
- Front
- Back
Absolute Advantage |
When one nation can produce a product at lower cost relative to another nation. |
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Comparative Advantage |
The goods in which a nation has its greatest productivity advantage or its smallest productivity disadvantage; also, the goods that a nation can produce at a lower cost when measured in terms of opportunity cost. |
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Intra-industry Trade |
International trade of goods within the same industry. In part due to splitting up the value chain, specialization in a specific area, expertise, and economies of scale, (only large factories compete, one factory is enough to supply all the cars in the UK, but then the UK wouldn't have any variety of car choice or industry competition.) |
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Splitting up the value chain |
When many of the different stages of producing a good happen in different geographic locations. |
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Differences in Opportunity Cost among Countries = |
Can allow all trade to benefit all participants. |