The producer who gives up less of other goods to produce Good X has the smaller opportunity cost of producing Good X.

The producer who has the smaller opportunity cost of producing a good is said to have a comparative advantage in producing that good.

The producer who requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good.

The gains from specialization and trade are based not on comparative advantage but on absolute advantage.

requires some workers in an economy to be retrained.

increases cooperation among nations.

allows people to specialize according to comparative advantage.

reduces competition among domestic companies.

comparative advantage.

trading advantage.

absolute advantage.

natural advantage.

the combinations of output that an economy should produce efficiently.

the combinations of output that an economy should consume efficiently.

the combinations of output that an economy can produce efficiently.

All of the above are correct.

The principle of comparative advantage applies to countries as well as to individuals.

A country may have a comparative advantage in producing a good, even though it lacks an absolute advantage in producing that good.

Comparative advantage is determined by which person or group of persons can produce a given quantity of a good using the fewest resources.

Economists use the principle of comparative advantage to emphasize the potential benefits of free trade.

The size of the economic pie would increase.

Worldwide production of goods and services would increase.

Each country's production possibilities frontier would shift inward.

The well-being of citizens in each country would be enhanced.

must benefit both countries equally; otherwise, trade is not mutually beneficial.

allows each country to consume at a point outside its production possibilities frontier.

can best be understood by examining the countries' absolute advantages.

limits a country's ability to produce goods and services on its own.

payments to land, labor, and capital.

locational and logistical circumstances.

opportunity costs.

input requirements per unit of output.

based on the principle of absolute advantage.

evident in the real world, but impossible to capture in economic models.

evident in economic models, but seldom observed in the real world.

a result of more efficient resource allocation than would be observed in the absence of trade.

shrinkage of the economic pie.

gains to some traders that exactly offset losses to other traders.

comparative advantage.

absolute advantage.