International Trade

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absolute advantage
the ability to produce a good or service more efficiently than another country can produce the same good or service
comparative advantage
the ability to produce a good or service at a lower opportunity cost than another country
dependent
requiring or relying on something
specialization
the act of limiting the kinds of goods and services produced
A country with an absolute advantage can produce a good or service
more efficiently than another country.
The Middle East is best associated with which internationally traded product?
oil
Which region specializes in diamonds?
Sub-Saharan Africa
Which is the best example of a country that is dependent on other countries?
a country that has little fertile soil
A company in Maine sends lobsters to France. What is this an example of?
exporting
The United States is said to have an absolute advantage in producing food compared with Japan. What does that mean?
It produces food more efficiently than Japan.
Why would a country want to establish absolute advantage?
to produce goods more efficiently than other countries
Which is the best example of opportunity cost?
A country that chooses to export bananas but not wheat.
Why does the US import oil?
because it does not produce enough oil
Which is an example of a country that is overly dependent on another country for critical goods and services?
a country that imports all its oil
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