Absolute Advantage Theory

Question 1

The cost incurred in producing an additional unit of product.

Answer 1

Marginal Cost

Question 2

He is the founder of modern economics and considered the father of economics.

Answer 2

Adam Smith

Question 3

It means that a producer can produce a good or service in greater quantity for the same cost or the same quantity at lower marginal cost

Answer 3

Absolute advantage

Question 4

It is also called Free market economy or free enterprise economy.

Answer 4

Capitalism

Question 5

Is an economic system where most means of production are privately owned and production is distributed through the operation of markets, w/c determine prices, products and services.

Answer 5

Capitalism

Question 6

Believes that countries should produce and export such products which they have an absolute advantage on and import those goods where they do not have.

Answer 6

Theory of Absolute Advantage

Question 7

A doctrine states that a nation can exchange its overproduction for other goods which are in demand in other countries, which will result in the fullest utilization of the idle productive capacity.

Answer 7

Vent of surplus

Question 8

Free trade promotes international division of labor through _________ in the production and exchange of such commodities.

Answer 8

Specialization

Question 9

Specialization increases ___________ through technical and organizational innovations.

Answer 9

Productivity

Question 10

A measure of the income generated in a production process, is value of outputs minus the value of inputs

Answer 10

Net Product