Chapter 2 Vocab

Question 1

Comparative Advantage

Answer 1

Better suited to the production of one good than to the production of another good.

Question 2

Efficiency

Answer 2

Achieving a goal using as few inputs as possible.

Question 3

Globalization

Answer 3

Increasing integration of economics, cultures, and institutions across the world.

Question 4

Inefficiency

Answer 4

Getting less output from inputs that, if devoted to some other activity, would produce more output.

Question 5

Laissez-faire

Answer 5

An economic policy of leaving coordination of individuals actions to the market.

Question 6

Law of One Price

Answer 6

The wages of workers in one country will not differ significantly from the wages of (equal) workers in another institutionally similar country.

Question 7

Production Possibility Curve

Answer 7

A curve measuring the maximum combination of outputs that can be obtained from a given number of inputs.

Question 8

Productive efficiency

Answer 8

Achieving as much output as possible from a given amount of inputs or resources.