Chapter 7 Terms Flashcards
1
Q
Efficiency
A
- The quality of producing effectively with a minimum of waste
2
Q
Input
A
- The total amount invested in the production of a good
3
Q
Output
A
- The total amount of a good that is produced
4
Q
Total Cost
A
- The sum cost of all the factors of production used in making goods
5
Q
Average Cost
A
- The sum cost of all the factors of production used in producing one unit of a good
6
Q
Advantages of Division of Labor
A
- More goods produced per person
- More inventions encouraged
- Fewer tools needed per worker
- Better use of resources
- More leisure for workers
- Greater variety of goods, including services
- Development of specialists
7
Q
Disadvantages of Division of Labor
A
- Boredom of workers
- Standardization of goods
- Technological unemployment
- Decline of small-scale industry
- Decline of skilled craftsmen
- Possibly hostility between labor and management in large industries
- Possible dislocations of a delicately interdependent economy
8
Q
Mass Production
A
- The “American System”
9
Q
The Components of Mass Production
A
- Division of labor
- Standardized products
- Automatic conveyance
10
Q
Absolute Advantage
A
- The ability of one entity to produce goods or provide services more efficiently than his competitors when given the same resources
11
Q
Comparative Advantage
A
- The ability of an entity to produce a good or provide a service at a good or provide a service at an opportunity cost that is lower that that of another producer
12
Q
Overspecialization
A
- When specialization is carried beyond the point of maximum efficiency
13
Q
Geographic Specialization
A
- The production of goods in which a country or region has absolute or comparative advantage
14
Q
Protectionism
A
- The theory that domestic manufacturers need government protection against foreign competitors
15
Q
Free Trade
A
- Whenever there are no restrictions or penalties placed upon the exchange of goods
