Question

level 1
match the following terms with their description.
the ability of a country to produce at a lower opportunity cost than another country.
the ability of a country to produce more efficiently (use less resources) than another country.
the relationship between how much money a country pays for its imports and how much it brings in from exports.
government actions designed to restrict foreign products from freely entering a nations territory.
a binding pact between governments meant to reduce the cost of trade.

Explanation:

• Comparative Advantage: Focuses on lower opportunity cost.
• Absolute Advantage: Focuses on more efficient production (less resources).
• Terms of Trade: Deals with import - export money relationship.
• Trade Barrier: Government actions to restrict foreign products.
• Trade Agreement: Binding pact to reduce trade cost.

Answer:

1. Comparative Advantage
2. Absolute Advantage
3. Terms of Trade
4. Trade Barrier
5. Trade Agreement