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envelope curve (DO)<br />A curve enclosing a whole family of curves, each of which contributes at least one point to the envelope. The main use of envelope curves is in relating long-run to short-run cost curves. In the figure SATC1-SATC4 are short-run average total cost curves; LRAC is the long-run average total cost curve.
absolute advantage (Fl)<br />An early theory of trade which states that one country enters into trade with another because it has a greater productivity than that country in a particular industry or industries, e.g. its cotton industry is more productive than the foreign cotton industry. sMITH advanced this as the reason for trade because a nation, like a household, should specialize.<br /><em>See also:</em> comparative advantage
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