Two statements are given. 1 One country can make a good at a lower opportunity cost than another country. 2 One country can make a larger amount of a good using the same amount of inputs as another country. What do these two statements describe?
- A1: absolute advantage; 2: comparative advantage
- B1: absolute advantage; 2: the terms of trade
- C1: comparative advantage; 2: absolute advantage
- D1: the terms of trade; 2: comparative advantage