1. Under what conditions is the production possibilities frontier linear rather than bowed out?
2. Explain how absolute advantage and comparative advantage differ.
3. Give an example in which one person has an absolute advantage in doing something but another person has a comparative advantage.
4. Is absolute advantage or comparative advantage more important for trade? Explain your reasoning using the example in your answer to Question 3.
5. If two parties trade based on comparative advantage and both gain, in what range must the price of the trade lie?
6. Why do economists oppose policies that restrict trade among nations?