Microecon Chap 3 Word Scramble
|
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
| Question | Answer |
| What is absolute advantage? | The ability to produce a good using fewer inputs than another producer. |
| What is opportunity cost? | Whatever must be given up obtaining some item and is used to measure the trade-off between the two goods that each producer faces. |
| What is comparative advantage? | The ability to produce a good at a lower opportunity cost than another producer and reflects the relative opportunity cost. |
| What is the principle of comparative advantage? | Each good should be produced by the individual that has the smaller opportunity cost of producing that good (specialization). |
| Can one person have a comparative advantage in both goods. | No, one person cannot have a comparative advantage in both goods, but one person can have an absolute advantage in both goods. |
| What is the relationship between opportunity costs and goods? | The opportunity cost of one good inverse the opportunity cost of the other good. |
| How do specialization and trade impact economies according to comparative advantage? | Specialization and trade can increase the total production in an economy which increases the size of the economic pie aiming everyone better off. |
| How is the price of trade determined? | The price of trade must lie between the two opportunity costs. |
| What does the principle of comparative advantage explain? | It explains interdependence and the gains from trade. |
| What are imports? | Goods produced abroad and sold domestically. |
| What are exports? | Goods produced domestically and sold abroad. |
Created by:
angry
Popular Economics sets