Key Terms

absolute advantage: when one country can use fewer resources to produce a good compared to another country; when a country is more productive compared to another country

gain from trade:: a country that can consume more than it can produce as a result of specialization and trade

intra-industry trade: international trade of goods within the same industry

splitting up the value chain: many of the different stages of producing a good happen in different geographic locations

tariffs: taxes that governments place on imported goods

value chain: how a good is produced in stages

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