โ ๏ธ Opening the cheat sheet costs $25,000 โ once per round!
๐ช Absolute Advantage
The ability to produce more of a good (output mode) or use fewer resources per unit (input mode). Just a raw comparison of numbers.
๐งฎ Opportunity Cost (OC)
Output mode: OC of 1 A = (B รท A). Input mode: OC of 1 A = (hours A รท hours B).
"What do I give up to make one more A?"
๐ฏ Comparative Advantage
The producer with the LOWER opportunity cost has CA in that good. CA โ AA โ a country can have AA in both goods but only CA in one.
๐ค Terms of Trade
A rate is mutually beneficial if it falls between the two producers' OCs. Outside that range, one side loses.