absolute advantage  a situation in which a person or country is more efficient at producing a good in comparison with another person or country.
capital abundant a higher level of capital per worker in one country relative to another.
capital intensive   production that uses a relatively high level of capital per worker.
commerce clause  the clause in the U.S. Constitution that prohibits restraint of trade between states.
comparative advantage  a situation in which a person or country can produce one good more efficiently than another good in comparison with another person or country.
factor-price equalization  the equalization of the price of labor and the price of capital across countries when they are engaging in free trade.
gains from trade  improvements in income, production, or satisfaction owing to the exchange of goods or services.
interindustry trade  trade between countries in goods from different industries.
international trade  the exchange of goods and services between people or firms in different nations.
intraindustry trade  trade between countries in goods from the same or similar industries.
labor abundant  a lower level of capital per worker in one country relative to another.
labor intensive  production that uses a relatively low level of capital per worker.
opportunity cost  the value of the next-best forgone alternative that was not chosen because something else was chosen.
quota  a governmental limit on the quantity of a good that may be imported or sold.
tariff  a tax on imports.