Chapter 7 part 1 Flashcards
Efficiency
the quality of producing effectively with a minimum of waste
input
the total amount invested in the production of a good
output
the total amount of a good that is produced
Truly efficient producers turn out ____ good at relatively ___ prices
quality, low
the two methods to improve efficiency
1) keep input steady and increase output
2) keep output constant while reducing input
abacus
one of the oldest known instruments for mathematical calculations
total cost
the sum cost of all the factors of production used in the making goods
average cost
the sum cost of all the factors of production used in producing one unit of a good
the advantages of the division of labor
1) more goods produced per person
2) more inventions encouraged
3) fewer tools needed per worker
4) better use of resources
5) more leisure for workers
6) greater variety of goods including services
7) development of specialists
the disadvantages of the division of labor
1) boredom of workers
2) standardization of goods
3) technological unemployment
4) decline of small-scale industry
5) decline of skilled craftsmen
6) possible hostility between labor and management in large industries
7) possible dislocations of a delicately interdependent economy
the three elements to mass production
division of labor, standardized parts, and automatic conveyance(assembly line)
overspecialization
the productive inefficiency that results when the division of labor is carried past the point of maximum efficiency
absolute advantage
the ability of one entity to produce goods or provide services more efficiently
comparative advantage
the ability of an entity to produce a good or provide a service at an opportunity cost that is lower than that of another producer
geographic specialization
the production of goods in which a country or region has absolute or comparative advantage
