Learning objectives
Distinguish absolute advantage (producing more with the same resources) from comparative advantage (producing at a lower opportunity cost)
Determine comparative advantage from output data and from input data by computing opportunity costs
Explain why each party should specialize in the good in which it has the comparative advantage and then trade
Identify the range of terms of trade, between the two opportunity costs, that leaves both parties better off
Show on PPCs how specialization and trade let each country consume beyond its own production possibilities
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