chapter 8

Question 1

PPC

Answer 1

Production possibilities curve- shows the relationship between the maximum production of one good for a given level of production of another good.

Question 2

Comparative Advantage

Answer 2

Is the ability of an individual, firm, or country to produce a certain good at a lower opportunity cost than other producers.

Question 3

Absolute Advantage

Answer 3

Is the ability of an individual, firm, or country to produce more of a certain good than other competing producers, given the same amount of resources

Question 4

Opportunity cost

Answer 4

the value of the next-best alternative when a decision is made

Question 5

imports

Answer 5

goods produced outside the boundaries of one country, which are then purchased by that country

Question 6

export

Answer 6

movable goods produced within the boundaries of one country, which are traded with another country

Question 7

How to expand the PPC

Answer 7

changes in the total amount of available production factors or by advancements in technology

Question 8

Tariffs

Answer 8

a tax imposed by one country on the goods and services imported from another country to influence it, raise revenues, or protect competitive advantages

Question 9

world price

Answer 9

the price of a good or service in any other country, except one’s own

Question 10

Issues with free trade

Answer 10

free trade invites foreign competition with domestic industries, causing job loss and harming key industries