Chapter 3 Vocab

Question 1

Absolute advantage

Answer 1

The ability to produce a good using fewer inputs than another producer; comparing productivity of a person, firm, or nation to another

Question 2

Comparative Advantage

Answer 2

The ability to produce a good at a lower opportunity cost than another producer

Question 3

Specialization

Answer 3

When an entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency

Question 4

Imports

Answer 4

Goods produced abroad and sold domestically

Question 5

Exports

Answer 5

Goods produced domestically and sold abroad