2

Question 1

adam smith (first modern economist 19th century)

Answer 1

believed increase in prosperity during the industrial revolution was due to specialization (he called division of labor)

believed specialization made people more productive but trade made them better off

Question 2

ppf

Answer 2

production possibilities frontier – graph showing the most of each of two goods a nation can produce when using their resources efficiently

Question 3

comparative advantage

Answer 3

when a nation can produce a good at a lower opportunity cost than another nation

Question 4

absolute advantage

Answer 4

when a nation can produce more of a good than another nation