Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The comparative advantage is the main factor that determines the international trade in the economy. The comparative advantage is the ability of an economy to produce the goods and services at the lowest opportunity cost of production than the other economies around the world. The opportunity cost of production is the quantity of one good that the economy needs to sacrifice in order to gain an additional unit of the other good from the economy.
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